Co-Chair’s Opening Remarks

Catherine Bray
Partner, National Leader, Real Estate Leasing Group
Borden Ladner Gervais LLP

Demystifying and Controlling Operating Costs to Diminish Their Financial Impact

Joseph Grignano

Partner, Blake, Cassels & Graydon LLP
Controlling operating costs is not only an economically sound practice, it is a question of survival in today’s economy.

• Tackling divergent business considerations when negotiating and allocating operating costs
• Ascertaining whether operating costs can be categorized as market
• Resolving the issue of renovations and improvements
• Recognizing the impact of the new IFRS on capital repairs/replacements
• Understanding how the new IFRS affect a commercial lease and the essential differences with GAAP
• Allocating realty taxes and obtaining assessment information
• Knowing how to adequately address Ontario’s new HST system
• Allocating operating costs among office, retail, parking and other components of a project
• Impact of recent case law on operating costs
  • Adapting the language in your lease to withstand the scrutiny of the Courts
  • Identifying a capital cost
  • Knowing when, if and how capital expenditures may be properly recovered as operating costs
  • Knowing what falls within the definition/interpretation of “Capital Repairs,” “Structural Repairs” or “Major Repairs”
• Strategically challenging operating costs
• The extent to which one may go with respect to auditing rights of operating costs
• Identifying limitation rights: What are reasonable limitations?
• When to step down when you don’t have the upper-hand

FAQ`s

• Strategies to help tenants keep operating costs under control: How has the situation changed following the financial crisis?
• In what circumstances can a landlord escalate operating costs and how can a tenant protect itself from unexpected and unbudgeted increases?
• How has the presence of US tenants in the retail sector impacted the way landlords negotiate operating costs with Canadian tenants?
• How does the duration of the lease impact the allocation of operating costs and how is it reflected in the lease?

Determining the Parties’ Respective Obligations Regarding Insurance, Liability and Damage & Destruction Clauses

Chris Steer
Insurance Specialist, Chris Steer Insurance Brokers

• Using correct insurance expressions to achieve correct insurance clauses
• Properly insuring a landlord’s building and a tenant’s contents
• Necessity of having proper:
  • Loss of Earnings insurance: Landlord’s rent, tenant’s sales
  • Boiler & Machinery Insurance
  • Liability Insurance: What amount? Who provides it?

FAQ`s

• Coinsurance vs. Stated Amount Coinsurance: What’s the advantage?
• Subrogation waivers: How does that affect me?
• Releases from liability: Is the coast really clear?
• Leasehold improvements: Whose are they? Who Insures?
• Landlord’s name on tenant’s Policies: What’s the risk for me?
• Bylaw Coverage: Why would I need that?
• Evidence of tenant’s insurance - Keeping It Simple

Grappling With Insurance Clauses: Achieving Consistency With the Other Clauses of the Lease to Properly Allocate Risk

Willam Rowlands
Partner, McMillan LLP

Rosalyn Wallace
Associate, McMillan LLP

• What regime does the lease provide for: Allocation of responsibility based on fault, based on location or based on insurance coverage?
• How much liability coverage is really needed by both parties?
  • Avoiding double coverage
• Ensuring that the indemnity and release provisions achieve consistency
• Damage and destruction clauses:
  • Circumstances under which a tenant can terminate its lease
• The importance of the interrelationship between the insurance provisions and the damage and destruction provisions
• Other clauses that interact with the insurance provisions: Operating costs, Tenant’s Work

Landlord & Tenant Insurance Considerations

• When is it appropriate for a tenant to have the right to self insure
• The impact of subletting on insurance provisions
• Payment of proceeds in respect of leasehold improvements
• Waivers of subrogation: What is the effect of not having one in favour of the tenant when the latter has paid for the insurance?
• The impact of subletting on insurance clauses

Environmental Concerns When Structuring a Lease: Knowing Your Rights and Obligations to Better Allocate Liability

Monty Warsh
Partner, Heenan Blaikie LLP, Solar Provider’s Perspective

Dennis Daoust
Partner, Daoust Vukovich LLP, Building Owner’s Perspective

Additional Critical Environmental Issues: Is Your Checklist Complete?

Rosalind Cooper
Partner, Fasken Martineau DuMoulin LLP

• Securing environmental representations, covenants and indemnities required from tenants
• Ensuring that the proper environmental provisions are included to avoid liability and clean-up costs
• Adopting strategies to defer environmental responsibility to the tenant and control clean-up
• Knowing what a tenant can reasonably negotiate or refuse
• Identifying special lender rights and assignment rights
• Properly conducting exit assessments
• Understanding and working with the definition of “clean premises”
• Understanding how indemnity provisions provide coverage
• Recognizing and managing the survival period of indemnity provisions following the expiry of the lease

Incorporating Lease Transfers & Exit Strategies into Your Agreements

Catherine Bray
Partner, National Leader, Real Estate Leasing Group
Borden Ladner Gervais LLP External Counsel’s Perspective

Amelia Nasrallah
Associate Counsel, Brookfield Office Properties Landlord’s Perspective

Thomas Santram
Legal Counsel & Chief Privacy Officer
Cineplex Entertainment LP Tenant’s Perspective

Understanding how the incorporation of lease transfer provisions and other exit strategies provide the parties with room to manoeuvre is critical. This session will provide you with the key strategies used to provide the parties with greater flexibility and the means to pre-emptively limit the financial impact of a tenant’s departure prior to the expiry of the lease.

STRATEGY A: Tenant Termination Provisions

• Knowing when a landlord will agree to termination provisions
• Key provisions for a tenant to include in drafting termination rights
• Identifying issues with co-tenancy and performance based termination rights

STRATEGY B: Negotiating Surrender: Is it Possible to Surrender and Maintain dignity?

• Knowing when a landlord will agree to accept a surrender
• Identifying the situations where it possible for a tenant to surrender without incurring significant financial costs
• Are surrenders always a clean break? Understanding what obligations may remain following the surrender

STRATEGY C: The Dark Side of “Going Dark”

• Knowing the preconditions on which landlords are insisting to agree to “go dark” provisions
• Is “going dark” as simple as shutting down operations and paying rent?

STRATEGY D: Assigning and Subletting

• Revisions to assignment and subletting provisions to give a tenant flexibility
• Understanding a landlord’s right to terminate in lieu of consent
• Challenging reasonableness and rights to withhold consent

Co-Chair’s Opening Remarks

Celia Hitch
Director, Retail Legal Services, Oxford Properties Group Inc.

Landlords & Tenants – Adjusting Negotiation Strategies According to Market Trends

Andrew Kidd
Senior Vice President, NorthWest Properties Corporation

Steven A. Cygelfarb
Partner, Fogler Rubinoff LLP

Not just another presentation on market trends...Understanding the market drivers will help you appreciate and anticipate your clients’ needs, set realistic expectations and offer more strategic advice.

• Knowing how commercial and retail leasing industries are evolving and the driving force behind it
• Anticipating market fluctuations to determine whether to engage in a short, mid or long-term lease
• Assessing whether the market encourages flexibility
• Understanding which Indicator will assist you in determining how aggressive you should you be and knowing when to step down
• Identifying the impact of non-traditional tenants on negotiation strategies
• Recognizing the US market trends that may impact your negotiation strategies

Strategically Managing a Party’s Default, Insolvency or Bankruptcy

Moshe Batalion
Assistant Vice President, Leasing Ontario, RioCan Management Inc.

Lisa A. Borsook
Partner, WeirFoulds LLP

Stephen Posen
Partner, Minden Gross LLP

• Knowing what to do when a tenant defaults: Notice, distress, termination, etc.
• Determining if the tenant is insolvent or bankrupt: Identifying the different rights and obligations of the parties and the applicable statutes
• Leasing strategies to deal with the default, insolvency or bankruptcy of a tenant
• Identifying the issues that need to be addressed between legal, leasing and operations in the wake or upon notification of a tenant’s default, insolvency or bankruptcy
• Understanding the restrictions related to what a landlord can do when the tenant is bankrupt
• Dealing with assignment by a tenant’s trustee
• Managing a tenant’s abandoned property
• Negotiating priority agreements with the tenant’s lender
• Dealing with guarantees, indemnities and letters of credit in the context of a tenant’s bankruptcy
• Knowing what to do when a landlord defaults: Set-off , damages, specific performance, injunction and fundamental breach
• Minimizing the impact of a landlord’s bankruptcy on the tenancy relationship
• Dealing with the rights and obligations of mortgagees and other lenders in possession
• Enforcing non-disturbance agreements

Overcoming Challenging Clauses at Each Stage of the Lease

Ellen Williamson
Vice President, Legal and Assistant General Counsel
The Cadillac Fairview Corporation Ltd., Landlord’s Perspective

Deborah Watkins
Partner, Daoust Vukovich LLP, Tenant’s Perspective

A variety of issues and challenges inevitably arise within the course of a lease. Knowing how to manage and overcome these challenges and understanding the rights and obligations of the parties pursuant to the different clauses of the lease is essential to maintaining stability in the relationship and protecting the respective rights of both the landlord and the tenant.

• Managing the legal implications associated with Rights of First Refusal and Rights of First Offer
• Right/option to expand: If rejected, does it die?
• Understanding the tenant’s restoration obligation
• Measuring and understanding the risk of co-tenancy clauses: Arriving at a collaborative solution during tough times
• Options to contract/downsize
• Right/option to relocate: Striking a balance between the parties
• Right to make improvements/alterations to the space
• Incorporating win-win exit strategies

Restrictive Covenants: Knowing Why Tenants Want Them and Landlords Dislike Them

Celia Hitch
Director, Retail Legal Services
Oxford Properties Group Inc. Landlord’s Perspective

Eva Gnissios
Corporate Counsel, Tim Hortons Inc. Tenant’s Perspective

Justin Mooney
Associate, Davis LLP External Counsel’s Perspective

• Negotiation strategies for the inclusion/exclusion of such clauses
• Circumstances under which exclusivity agreements should be granted
• Striking a balance between the landlord, its anchor tenants and other tenants through the use and enforcement of restrictive covenants
• Exercising discretion to grant exceptions to small retailers
• Properly managing competing interests: Soliciting/keeping an anchor tenant vs. ensuring that the property is fully leased
• Protecting for/against evolving retail concepts
• Identifying certain considerations related to the Competition Act
• Drafting an exclusivity agreement that meets the needs of the retailer and to protect the interests of the landlord
• Understanding the interrelationship between restrictive covenants and the other clauses of the lease (e.g. default, transfer)
• What is the right remedy for a tenant for a breached exclusive?
• Understanding the impact of case law on exclusivity agreements

Case Law Update: Examining the Courts’ Treatment of Disputes Involving Ambiguous Clauses

Laurie Sanderson
Partner
Head of the Real Estate National Practice Group Gowlings LLP
More than just another case law update...

• Understanding the impact of recent case law on your lease agreements
  • Are there words, clauses, phrases or concepts that are particularly problematic and what can be done to avoid them or to hedge your bets?
  • How will case law affect specific terms and clauses?
  • Can a term or a clause be interpreted otherwise?
• Recognizing how to adapt the lease to take recent case law into consideration
• Designing negotiation, drafting and enforcement strategies to achieve clarity
• Navigating the gray zones: What is negotiable? Where is the leverage?

Delving into the Concerns that are Specific to the Franchise Relationship

David Thompson
Partner, WeirFoulds LLP

• Fundamental decision making: Who controls the real estate and why is this important?
• Understanding how clauses and restrictions within the lease can be used in your favour: Who are your competitors and how is your franchise business evolving?
• Understanding lease inducement: Who do they benefit and do they work in the franchising context?
• Negotiating CAM/Taxes and its impact on the franchisee
• Negotiating the term of the lease within context of a franchise relationship
• Controlling default and remedies and understanding their applicability to a franchisee
• Understanding how renovations and additions by the franchisee may affect the franchisor and the landlord
• Indemnities: Who exactly are you indemnifying for and why this matters?
• Understanding certain considerations involving the clauses within the leases in situations where you franchise or intend to franchise