Before the pandemic, Ernest Bux’s niece Chit Bux signed a lease with Iona Mall in an upscale strip shopping center and hired a contractor to build out her dream business – a beauty salon “Cuts & Fluffs.” When Dallas County ordered businesses to “shutter” last spring, Chit’s “essential business” construction continued toward the scheduled July 1st opening date – perhaps the worst time to open a high-touch, close-quarters beauty salon. Having dealt with other unsuccessful startups in that lease space, Iona needed Cuts & Fluffs to succeed; Chit needed a different opening date – much later when people were less fearful of crowds. Chit called Iona, her contractor and her banker who was shepherding her SBA loan. Can Chit work something out with Iona without completely modifying her lease?
Legally
Yes, with sufficient care, a thoughtful email exchange between Chit and Iona modifying critical terms of the Cuts & Fluffs – including the retail lease commencement date – can be accomplished without major changes to their lease. Customarily, a retail lease will provide “[t]his Lease embodies the entire agreement and understanding between the parties. No provision of this Lease may be modified, waived or discharged except by an instrument in writing signed by the party against whom enforcement is sought.” Under Texas law a thoughtful exchange of email messages can satisfy the writing requirement to become an enforceable agreement so long as, taken together, the emails satisfy the completeness requirement. Finally, the email messages, themselves, can satisfy the signature requirement. Assuming that the emails between both parties communicate the deal points completely and unambiguously, confirmation emails – acknowledging agreement to the changes in terms – is sufficient.
Practically
After getting buy-in from Iona to delay the Cuts & Fluffs grand opening to September or October and Iona’s continuing commitment to pay the landlord’s share of the tenant improvement costs to the contractor, Chit coordinated with her contractor and her banker. Supported by the Small Business Association guidelines that permitted him some flexibility, Chit’s banker agreed to adjust certain loan agreement and note deadlines consistent with lease term changes agreed by Iona. The contractor, initially happy to continue construction and keep his crew busy, later reconsidered the health risks and implemented a daily check-in policy requiring his laborers to first be checked out with a temple touch forehead thermometer.
Tilting the Scales in Your Favor
This happened – very close to Chit and Iona’s story. With some coaching, Chit was able to separate herself – and her plight – from the dozens of others who faced making late (or no) lease payments. Chit knew that Iona had multiple failed tenants in the same space – before the pandemic. Chit’s salon concept was unique; her likely clientele was a perfect “fit” for the rest of the shopping center. Cuts & Fluffs concept was just what Iona needed. There was little protest that a beauty salon – opening on July 1st – risked an early demise. Agreeing to a more favorable opening /commencement of lease date – while continuing to build out the space to be ready when the time was right – presents a great opportunity for a win/win for both Chit and Iona. To bind their agreement, it was incumbent upon Chit to lay out their agreement and have Iona reply with a confirming email – accepting the revised plan. Chit did; Iona acknowledged. Time will tell if Cuts & Fluffs pulls it off – at least it now has a fighting chance.
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