Texas Real Estate Blog

Leases,Workletters and Tuesday Morning Quarterbacking

February 8, 2011
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Well, it’s Tuesday morning after Super Bowl Sunday and the news is filled with wonderful highlights from the big game.  However, who would have guessed that real estate issues would dominate the discussions. Yes, as fans and Cowboy haters all over the country blame and threaten Jerry for the ticket disaster, little does everyone know that the devil (no-not Jerry) is in the details (contracts and legal status) as opposed to the obvious fact that the stadium is owned by Jerry’s partnership. When you boil this down, I believe we will be focused on two sections of a lease which are commonly overlooked– the “alterations” paragraph and the “workletter” addendum.  It is my understanding from talking to lawyers close to the Cowboys that the parties in the Superbowl set up this way: Landlord: Cowboys (Jerry’s ownership partnership), Tenant: NFL,  and Licensees of Tenant: Fans. Based on what I can surmise from the serious crawfishing by the NFL, I am assuming that the NFL had control over the construction of those stands and simply realized way too late that, due to the enormity of the job and some unexpected weather problems, the record attendance was not going to happen. This high-profile screw up is going to put a magnifying glass on the interplay (or lack thereof) of the basic construction and alteration paragraphs of a lease. Normally, the Landlord will have complete discretion and consent over all alterations or construction done to its premises. However, even though it may have such consent, it may, nevertheless give to the Tenant control over the actual construction subject to the protection  and indemnification of the Landlord. The infamous “workletter” which is buried as an addendum to the Lease is of major importance here because it addresses the scope, authority and liability of the various parties (including the contractor) in connection with  the construction. I have always maintained that the most complex area of real estate law is in the construction area as, in this area, we have to delve into, and understand, other disciplines (engineers and architects) that are integral to the process. I am guessing from the way this is shaking out is that the NFL got Jerry’s consent (leave them there for next year!)to build the stands with the proper consent and indemnification back to Jerry. That’s just one simplistic reason the, the NFL, is taking the lead on resolving the issue.

Now, what about the poor fans?As you can tell they are not happy http://newsfeed.time.com/2011/02/08/super-bowl-ticket-scandal-are-fans-planning-a-suit/?hpt=T1 and the NFL seems to be cratering like a cheap Super Bowl tent http://www.cnn.com/2011/SPORT/football/02/08/super.bowl.seating/index.html?hpt=T1# My opinion here is that the NFL  (a) is trying to do the right thing for the fans and (b)is bracing itself for a huge image problem with the lockout on the horizon. Because, I believe the NFL has little exposure and, potentially, several defenses (force majeur??!)to the claims of these fans.  The next time you attend a sporting event, read the back of your ticket and see what legal status you hold under that agreement. Generally by purchase of the ticket, you are purchasing a revocable license to enter upon the premises of the owner of the property. Sounds kind of screwy doesn’t it? All along we thought we were buying the ticket to support our team when, in reality and legally, we are buying a ticket for the privilege of watching their team. Ugh–the truth hurts. As a “licensee” (quote-Black’s Law Dictionary)-we have the privilege to enter upon land arising from the permission or consent, express or implied, of the possessor of the land but we go on the land for our own purpose rather than any purpose or interest of the possessor”. Make sense? Yeah, I didn’t think so. The only duty the possessor (Jerry and the NFL) owe us is the duty of reasonable or due care. Ergo, the reason the NFL pulled the plug (with the help of the City of Arlington) on the stands is that their liability for an injury to someone (because they knew of the dangerous condition of the stands from the fire marshal and the contractor) was much higher than denying access. Of course, everything I have just expressed is purely my opinion based on a ton of assumed facts and without seeing any of the documentation on this event; however,  if I am a fan who got hosed on this deal I take my triple refund and tickets to next year’s bowl and run!!

Nevertheless, a big thanks to all Steelers and Packer Fans for making this a great event. I have been to several Cowboy/Steelers/Packer games (Remember SB XXX!) and can attest to the class and quality of the Green Bay and Steelers faithful. (sorry about the weather-we were just trying to make you feel at home). Also, much thanks to the Bowl Committee for their tireless work and the citizens of the Metroplex for their Texas hospitality. It was a great time and super experience.

Final thought—-see this situation where Jerry might have some exposure  http://superbowlblog.dallasnews.com/archives/2011/02/jerry-jones-facing-lawsuit-fro.html Yeah right-get in line!

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    Steve Watten


    Real Estate News& Views

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