Key Considerations in Commercial Real Estate Leasing: Demystifying the Legal Landscape
Commercial real estate leasing involves a myriad of legal considerations for consumers. The lease agreement serves as the backbone of the leasing process, requiring careful review to protect consumer rights. Commercial real estate leasing can be a complex and intricate process for consumers, involving various legal considerations that must be carefully navigated. At the core of this process lies the lease agreement, which is the foundation of the lease relationship.
To protect their rights and interests, consumers must thoroughly review the lease agreement, paying close attention to its terms and conditions. This includes understanding and negotiating key aspects such as rent, lease duration, maintenance responsibilities, and dispute resolution mechanisms. Financial considerations are also critical, as consumers must strike a balance between the cost of the lease and the value they receive. This involves negotiating the rent amount and understanding and accounting for additional expenses, such as common area maintenance (CAM) fees, insurance costs, property taxes, and utilities. Moreover, consumers need to be vigilant about the condition of the property they are leasing. Conducting thorough inspections and ensuring that the lease agreement clearly outlines the landlord’s maintenance responsibilities can help protect their investment and avoid potential disruptions to their business operations. Another important aspect for consumers to consider is the flexibility to assign or sublease the leased premises.
Understanding the terms and conditions related to assignment and subleasing provisions allows consumers to assess their options for growth and expansion while adhering to the landlord’s requirements. In addition, consumers should carefully review the default and termination clauses in the lease agreement to safeguard their interests in case of any unforeseen circumstances. These clauses define the consequences of default and outline the procedures for terminating the lease, ensuring that consumers have appropriate remedies and protections.
Lastly, compliance with applicable laws and regulations is essential for consumers to maintain their integrity and avoid legal issues. Understanding and adhering to zoning restrictions, permits, licenses, and other legal obligations prevents potential legal consequences and contributes to responsible business practices. Consumers can establish a solid foundation for a successful and secure leasing experience by considering and navigating these legal aspects of commercial real estate leasing.
In conclusion, commercial real estate leasing involves a range of legal aspects that must be carefully addressed in the lease agreement. By paying close attention to the terms and conditions related to the leased premises, financial obligations, property condition and maintenance, assignment and subleasing, default and termination, and compliance with laws and regulations, landlords and tenants can establish a secure and fair leasing arrangement. Seeking the guidance of legal professionals experienced in commercial real estate law is advisable to ensure that all legal considerations are adequately addressed, protecting the interests of all parties involved.
Affirmative Action in the United States is as controversial as it is complex, and a topic that has sparked intense litigation, capturing a significant portion of American legal history. While the term itself was first linked to a policies promoting racial equality in 1961 in an Executive Order issued by President John F. Kennedy, its application to educational institutions began much earlier. In a nutshell, Affirmative Action refers to policies and practices aimed at providing opportunities to historically marginalized groups, particularly racial and ethnic minorities, women, and individuals with disabilities. The objective is to address the historical disadvantages and discrimination faced by these groups and promote equal opportunities.
Perhaps the first instance of historic litigation on affirmative action was Brown v. Board of Education, (1954) (‘Brown’). In actuality, this name was given to five separate cases that were heard by the U.S. Supreme Court regarding the constitutional validity of segregation in public schools. The Supreme Court ruled unanimously that racial segregation in public schools violated the Equal Protection Clause of the Fourteenth Amendment to the Constitution of the United States of America. The decision overturned the “separate but equal” doctrine established by Plessy v. Ferguson in 1896, which had allowed for racially segregated public facilities. Brown was pivotal in the American civil rights movement, highlighting the inherent inequality of segregated education and setting the stage for desegregation efforts across the United States.
Following Brown, Regents of the University of California v. Bakke (1978) (‘Regents’)was another landmark ruling on affirmative action. Allan Bakke, a white applicant, challenged the University of California’s affirmative action program, which set aside a specific number of seats for minority applicants. With a 5-4 majority, the Supreme Court held that quotas may not be used for reserving seats for minority applicants. However, it upheld the idea that race could be considered as one factor among many in the admissions process. This decision established the principle of “narrowly tailored” affirmative action, requiring institutions to consider race as part of a holistic review process rather than using rigid quotas.
In Grutter v. Bollinger (2003), University of Michigan Law School’s affirmative action policy was challenged by a white applicant who was denied admissions despite having the requisite qualifications. The admissions policy took candidates’ into consideration without granting them automatic advantage. The Court, in a 5-4 decision, held that the school’s policy, which considered race as one of many factors in admissions decisions, was “narrowly tailored” to achieve the compelling interest of diversity. The decision emphasized the educational benefits of diversity and recognized that race-conscious admissions programs could be constitutional under certain circumstances, and was therefore did not violate equal protection guaranteed by their Constitution.
The Supreme Court’s stance on affirmative action shifted significantly in Fisher v. University of Texas at Austin. Abigail Fisher, a white applicant, challenged the university’s affirmative action policy, claiming she was denied admission based on her race. In 2013, the Court sent the case back to the lower courts, instructing them to apply a strict scrutiny standard to assess whether the university’s admissions policy met the necessary requirements. The case was later revisited in 2016, and the Court upheld the university’s policy, emphasizing that it met the standards of strict scrutiny.
Most recently On June 29, 2023, U.S. the Supreme Court ruled the affirmative action policies of the University of Harvard and University of North Carolina as unconstitutional. This ruling now prohibits universities from now considering race as a factor for admission of students. What this implies, effectively, is that number of students in universities from under-represented minorities in the U.S. (Hispanic, Black, Asian-American, Indigenous etc.) will reduce over time, affecting the overall diversity of a student body. Will this impact international students applying to American universities for higher education? Probably.
While corporate governance has been a top matter of discussion over the past year, the latest incident of Mojocare founders confessing to its investors on inflating revenue has underlined the need to keep a close watch on the operations of startups. Venture-funded startups like BharatPe, Byju’s, Zilingo, Rahul Yadav’s 4B Networks and Trell are among companies that have allegedly had governance issues in the last one year. Everyone is cautious about what might be happening even in early-stage firms and it’s better to get it checked in early stages given the current state of affairs. India is emerging as one of the fastest-growing start-up nations in the world, with over 98,000 start-ups, 400+ incubators, and 108+ unicorns. Indian start-ups are making their presence felt across the world, contributing to both the socio-economic growth of India and other emerging economies, as well as gaining recognition from global investor communities, including governments. The start-up sector in India has, over the last few years, become a key indicator of the economic growth of the country. A start-up is faced with several issues that must be dealt with in order for it to grow into a successful organization. Apart from planning the most effective business strategies, a start-up needs to look at the regulatory, legal and tax regimes of the country where it is proposed to be set up and carry on business. In many instances, appropriate structuring for a start-up helps to prevent future complications and mitigate risks at a future stage. Introducing corporate governance norms early in a start-up has several benefits that can outweigh the potential diversion of focus.
Here are some of the key benefits: ▪ Enhanced accountability: Corporate governance norms ensure that the startup is accountable to its stakeholders, including investors, customers, and employees. This can help establish trust and credibility, which is essential for the long-term success of the business. ▪ Improved decision-making: By establishing a clear framework for decision-making, corporate governance norms can help the startup make better decisions that align with its values and objectives. ▪ Reduced risk: Corporate governance norms can help the startup identify and manage potential risks, including legal and regulatory compliance, financial reporting, and data privacy. ▪ Increased access to capital and partnership: Investors and lenders are more likely to invest in startups that have established corporate governance norms. This can help the startup raise capital more easily and at more favorable terms. Furthermore, start-ups that adopt good governance practices tend to attract higher valuation premiums, which can assist in their overall fundraising and growth journey. ▪ Stronger reputation: A startup that upholds high standards of corporate governance is likely to have a stronger reputation in the market, which can help attract customers, employees, and partners. While there is a potential risk that corporate governance norms could increase costs and/or curtail innovative thinking, it is possible to mitigate this risk by balancing governance with a culture of innovation and regularly reviewing and updating governance frameworks. The overall benefits far exceed the possible downsides. Start-ups are growing at a fast pace and with strong aspirations. The Indian start-up ecosystem is poised to create jobs, generate wealth, and transform societies. The governance framework has the potential to act as a catalyst for start-ups to remain conscious during important decision-making processes. LegitPro Associates Corporate Governance team completed 2 assignments of Drafting Comprehensive Governance framework for one Series A funded start-up and another for Series B funded start-up. Corporate governance acts as a knight in shining armor, rescuing both founders and partners at all stages, during and after fund-raising. As the saying goes, right begets right and wrong begets wrong. Following the sound principles of corporate governance will always enable a start-up to make sound investment decisions, establish best practices in the form of rights, duties, obligations, and liabilities, and ensure its smooth functioning and growth. This framework is the first step of many in the right direction!
Relating to sports activities in the country, sports law is an ever evolving and emerging law in India that revolves around acts of players, associates covering areas of contract, intellectual property and tort law but sans a proper legislation. A great part of sports law is covered by Contract Act which within its scope includes contracts between sports players and other parties doping policies deciding liability in the light of toddler harassment in sports intellectual property and players rights. Few other avenues may include broadcasting and endorsement of advertisements rules and policies regarding conflict of interest.
VARIOUS CONTRACTS IN SPORTS LAW
Various contracts can be drafted between players and other parties to name a few agency, indemnity, appearance, endorsement, and standard player contract. A Standard Player Contract is signed between sports clubs and athlete where the athlete agrees to represent and play for a sports club regardless of bonus or salary that he receives. On the other hand, an Appearance Contract the sign to appear in a public function for an exchange of consideration. The rate of consideration and the term of appearance is decided in this contract. The establisher of relations between athlete and private persons or sponsors to use the image of athletes in advertisements is called as the Endorsement Contract. As a lot of sports persons are susceptible to injuries insurance agreements are a must for clubs and event organisers which is manifested through Indemnity Agreements. Professional aspects of an athlete are managed by an agent due to which they have an agent principal relation between them called as the Agency Contract.
ANTI- DOPING POLICY IN SPORTS LAW
Ethical manual ordains law against doping. Usage of drugs as performance enhancers are banned according to the Anti-Doping Laws formulated by various authorities. This is for adhering to world Anti-Doping Agency Code and educate people about ill effects of such psychotropic substances. Few Anti-Doping violations include, presence of prohibited substances or the metabolites in athlete’s sample, use or attempt to use of prohibited substance by an athlete, refusing to submit a sample despite being notified, failure to provide information for where about or unavailability for doping control examination, trafficking of prohibited substance or tempering with Anti-Doping control method, complicity and prohibited Association. The World Anti-Doping Agency annually updates the list of prohibited substances or methods. This International standard define what is prohibition in-competition and out-competition the list goes on to indicate if a particular substance is banned in sports. Indeed, with such diversity even competition law is felt important since it renders a contract void if it affects the market.
The CCI may ask the iPhone company to make changes to its app store billing and commission policies, as it has done in the case of Google, experts said. That would require Apple to open the ‘walled garden’, its closely guarded iOS operating system, something that the world’s most valuable company has not had to do anywhere in the world.
After its order against Google on 25th October 2022, probe against Apple is already completed and at the review stage after CCI got a new chairperson recently. Investigations into cases relating to Amazon, Meta, Swiggy, Zomato, Google, and news publishers are also in advanced stages, it is learned.
Almost for a decade all these Big Tech companies enjoyed free ride in India as far the question of abuse of Dominant position is concerned. They formed the policies, payment methods and collaborations at their own will without facing any challenge from regulatory body.
All of sudden, in last 3 years CCI started probe and order against Google was treated like landmark decision which imposed Rs. 1337 Crore fine and directing Google to allow third-party billing systems for payment on its app store and not limit the option for users to Google Play’s billing system (GPBS). Even, NCLT uphold the decision of CCI. Earlier, The Competition Commission of India (CCI) recently held the e-hospitality platform giants MakeMyTrip- Go Ibibo and Oyo guilty of unfair trade practices. It imposed a combined pecuniary sanction of $47 million along with behavioural sanctions.
Now, probe against Apple’s app store billing and policies under review and the parties involved in the case will be called next to make their submission. The findings of the probe and the stand of the CCI are likely to be in line with the order against Google. If the CCI insists that Apple allow alternative payment methods to co-exist on its app store, then Apple ‘walled garden’ crumbles for sure. Amazon case is even more serious in nature as its directly/indirectly impacts lakhs of sellers specially domestic sellers.
After Google, Apple & Amazon, next in line are Meta, Swiggy, Zomato etc. and its seems like CCI first want to tame the Big Foreign Tech Companies and then home grown Unicorns are going to face the music. CCI’s evolving position on data-driven digital markets needs further analysis and more defined regulatory framework.
Quantum of Penalty & Relevant Turnover:
As per the provision, CCI has a discretion to impose a penalty with a quantum anywhere between 0-10 percent of the turnover. Wherein a cap of 10 percent has been imposed to keep a check on the powers of the CCI as well. In the Excel Corp Care vs CCI case, the Supreme Court had held that the penalty under competition laws be stipulated on the basis of the ‘relevant turnover’ — turnover from the business engaged in violating conduct in the case of multi-product companies.
Moreover, CCI itself in the case of Delhi Vyapar Mahasangh vs Flipkart & Ors., and Lifestyle Equities C.V. vs Amazon noted that different segments of e-commerce platforms offer different dynamics and cannot be equated. It opined that while revenue segmentation is more appropriate in brick-and-mortar businesses, the integrated nature of multiple products and services offered over online platforms makes the relevant turnover rule ill-suited for digital platforms, exempting them from Supreme Court’s rule. It would thus be interesting to see how the appellate forums deal with this issue, given that the regulator’s decision contradicts the apex court.
Conclusion:
Global developments witnessed in the past few years have led to a paradigm shift in the market dynamics. This shift has been propelled by thriving e-commerce model, evolving digital technologies, emerging new age markets and emergence of new business models. Well defined provision of law, clear guidance by the regulator, certainty in interpretation of the law and predictability of outcomes will surely secure the interest of all stakeholders in the competition regime.
