TLD's General Counsel Blog

Commercial Lease Agreements

Most businesses either own or lease space in which to conduct their business. One especially significant term in a commercial lease agreement is the rental amount. Depending on the length of the lease, either the landlord or the tenant may want to have adjustments to the rental amount over time. One common term included in commercial lease agreements is an adjustment based on "CPI" or the Consumer Price Index.

This is a complicated term and one in which most landlords and tenants are unfamiliar. The Department of Labor releases a number of different "indexes." Several of the most frequently used are:

Consumer Price Index for All Urban Consumers for the United States, Consumer Price Index for Urban Wage Earners and Clerical Workers for the United States, Consumer Price Index (All Urban Consumers) for a designated region, and Consumer Price Index (Urban Wage Earners and Clerical Workers) for a designated region.

The later two regional indexes are generated by the Department of Labor for three different metropolitan areas in California: the San Diego Metropolitan Statistical Area, the San Francisco-Oakland-San Jose Consolidated Metropolitan Statistical Area, and the Los Angeles-Anaheim-Riverside Consolidated Metropolitan Area.

Normally, the Index used in the Lease will specifically reference which of these it is referring to.

AVERAGE INCREASE OF EACH INDEX

The average increase in each of these indexes is as follows:

1. Consumer Price Index (All Urban Consumers)

2000 2%
2001 3%
2002 3%
2003 1.6%
2004 2.2%
2005 2.7%
2006 3.1%
2007 3.6%
2008 3.8%

2. Consumer Price Index –Urban Wage Earners and Clerical Workers

2001 2.9%
2002 1.1%
2003 2.2%
2004 2.0%
2005 3.65%
2006 3.68%
2007 2.5%
2008 4.2%

3. Consumer Price Index – All Urban Consumers – Los Angeles

2001 3.5%
2002 3.1%
2003 2.9%
2004 2.2%
2005 4.7%
2006 4.6%
2007 3.5%
2008 3.1%

The normal term in a CPI adjusted lease would say something to the following:

(b) Commencing with the thirteenth (13th) full calendar month after Tenant is obligated to pay rent under this Lease, and at the end of each twelfth (12th) month afterwards during the Term, including any extensions or renewals, the Minimum Monthly Rent for the ensuing twelve (12) month period ("Adjustment Period") shall be an amount equal to the greater of:

(i) the Minimum Monthly Rent in effect immediately prior to the commencement of this Adjustment Period (without regard to any temporary abatement of Rental then or previously in effect pursuant to the provisions of this Lease), or

(ii) the product obtained by multiplying the Minimum Monthly Rent in effect immediately prior to the commencement of the Adjustment Period (without regard to any temporary abatement of Rental then or previously in effect pursuant to the provisions of this Lease) by a fraction, the numerator of which is the Index published nearest but prior to the commencement date of the Adjustment Period and the denominator of which is the Index published nearest but prior to the commencement of the twelve (12) month period immediately preceding the Adjustment Period.

The INDEX is defined as one of the above-referenced indexes.

A TLD attorney can make sense out of the rental adjustment term in your lease agreement, as well as any other terms that may be confusing or uncertain.

Please call us if you would like a lease review or an attorney to help you negotiate a lease agreement.

Article Submitted By: Attorney Brooke Pollard

Restraining Orders

Restraining orders are powerful tools that we have used to protect our clients in a variety of situations. Restraining orders can limit both physical interactions and communications by telephone, email, or mail. In addition, certain restraining orders can grant monetary damages and even affect long term child custody. While common in domestic violence cases, restraining orders also are not limited to family or romantic relationships. They may also be appropriate in business or real estate disputes where there have been threats of violence or physical altercations. Restraining orders may also be appropriate where there has not been any physical threats or abuse. For example, elder abuse restraining orders may be granted to protect an elder or dependent adult from family, neighbors, caretakers, or any other person who may have engaged in financial abuse or otherwise acted to jeopardize the elder or dependent adult’s physical or financial well-being.

Article Submitted By: Attorney Jennifer Lumsdaine

Cal/OSHA - Tips for Helping Employees Work Safely, Minimize Heat Stress

What can I do to protect my employees from the effects of working in high temperatures?

When employees work in hot conditions, employers must take special precautions in order to prevent heat illness. Heat illness can progress to heat stroke and be fatal, especially when emergency treatment is delayed. Operations involving high air temperatures, radiant heat sources, high humidity, direct physical contact with hot objects, or  strenuous physical activities have a high potential for inducing heat stress in employees engaged in such operations. During the summer, workers employed in outside jobs such as construction and agriculture are subjected to many of these conditions and, for those who ignore the signs and symptoms, can become victims of a heat stress incident. According to Cal/OSHA, heat illness contributed to 12 work-related deaths in 2005 and eight in 2006. It has been well publicized that Cal/OSHA has adopted regulations for outdoor workers to address the employer’s responsibility to ensure that employees are provided means to counter the effects of working in high temperatures. These requirements, Heat Illness Prevention in Outdoor Places of Employment, are contained in Section 3395 of the General Industry Safety Orders.

Injury/Illness Prevention Plan

Employers are required to put their heat illness prevention procedures, including employee training, in writing. It is recommended this document be incorporated into the employer’s injury and illness prevention plan (IIPP). Training, at a minimum should include: l why it is important to prevent heat illness; l procedures for acclimatization; l the need to drink water frequently; l the need to take breaks out of the heat; l how to recognize the symptoms of heat illness; l how to contact emergency services and how to effectively report the work location to 911; l the importance of choosing water instead of soda or other caffeinated beverages and avoiding alcoholic beverages all together during high heat.

Signs to Recognize

There are several “causal factors” that may affect a person’s sensitivity to heat. Age, weight, degree of physical fitness, degree of acclimatization, metabolism, use of alcohol or drugs, and a variety of medical conditions such as hypertension, all affect a person’s sensitivity to heat. Even the type of clothing worn must be considered. Prior heat injury predisposes an individual to additional injury. Four conditions must be recognized by supervisors of employees potentially exposed to heat stress: Heat rash or prickly heat, heat cramps, heat exhaustion, and heat stroke. The Cal/OSHA website, HRCalifornia and CalChamber booklets contain detailed descriptions and symptoms of heat stress-related illnesses with intervention treatments. Specific measures that can be adopted to lessen the likelihood of a heat stress illness include: l administrative controls, such as work rotation, starting work early in the morning or in the evening; l providing plenty of fluids to drink, especially water; and l providing personal protective equipment in the form of cooling vests and light-colored or reflective clothing and/or shade.

Heat Risks

There is no absolute cut-off below which work in heat is not a risk. With heavy work at high relative humidity or if workers are wearing protective clothing, even work at 70 degrees Fahrenheit can present a risk. In the relative humidity levels (20 percent to 40 percent) often found in hot areas of California, employers need to take some actions to effectively reduce heat illness risk when temperatures approach 80 degrees Fahrenheit. It is especially important to be vigilant during periods of abnormally high heat. Even though Section 3395 is specific to outdoor workers, the requirements can be useful to all employers who have employees subject to working in/at a work site where the temperature/humidity can result in heat illness — for example, poorly ventilated warehouses, work processes exposing employees to high temperatures and/or humidity such as foundries or glass bottle manufactures, construction sites, etc. Heat illness is a foreseeable hazard as defined and enforced by Cal/OSHA.

Using Section 3395, employers can address the conditions within a building or permanent work site and prevent the occurrence of heat illness. As stated previously, the steps taken should be included in the company’s IIPP.

More Information

Cal/OSHA has published informational documents at www.dir.ca.gov. Click on “Heat Illness Prevention” under “What’s new.” CalChamber members can find information on heat illness by searching on “heat illness” at www.hrcalifornia.com. In addition, the CalChamber has developed a mini-book, Heat Illness Prevention in California. It is written in both English and Spanish and has readily understood illustrations of the outward symptoms of heat illness. For information on obtaining this booklet, call (800) 331-8877 or visit www.calbizcentral.com.

Article Provided by: volume 34, number 18 ● June 6, 2008 of the CalChamber Alert Newsletter. And written by Mel Davis - Cal/OSHA Consultant