Shopping Centers

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Types of Shopping Centers

Commercial shopping centers generally fall into one of two basic types: the regional center, or the “strip center.” The regional center usually contains an enclosed mall and serves a relatively large, regional geographical area. One or more large chain or other retail users typically “anchor” the center and may participate in the center as owners in fee. The regional center also contains a variety of smaller commercial and service tenants.

A strip center is smaller than a regional center, usually serves a neighborhood or community, and is not enclosed. It may be anchored by one or more of the following: a grocery store; a drug store; or one of the larger retail chains.

Multiple Owners of Shopping Center

[1] Reciprocal Easement Agreements (REAs)

Multiple owners are often involved in the development and operation of a shopping center. For example, it is not uncommon for a key department store or other large retailer to own the real property on which its store will be located, and to participate in the development of the shopping center with other owners of real property that will be included in the shopping center. Whenever multiple owners are or will be involved, it is necessary to provide by agreement for the integration of their multiple interests into a unified plan for the development, use, and operation of the shopping center. For a retail shopping center with one or more major owner-occupants, this is usually accomplished by negotiating and executing a mutual or reciprocal easement agreement (REA) at or around the time of acquisition of the interests in the property.

Generally, REAs are informal arrangements between adjoining landowners under which the landowners agree to share the use of stairways, driveways, waterways, or other appurtenances [seePorto v. Vosti (1955) 136 Cal. App. 2d 395, 397, 288 P.2d 618 (agreement to share water from well); Dierssen v. McCormack (1938) 28 Cal. App. 2d 164, 169–170, 82 P.2d 212 (agreement to share water flow in ditch); O’Neil v. Edwards (1928) 95 Cal. App. 523, 524, 272 P. 1099 (agreement to share use of driveway)], or to allow for the passage of light or air between buildings [Knoch v. Haizlip (1912) 163 Cal. 146, 151–152, 124 P. 998]. Rights analogous to easements sometimes arise when landowners enter into oral agreements for revocable licenses which thereafter become irrevocable [See Cooke v. Ramponi (1952) 38 Cal. 2d 282, 286, 239 P.2d 638]. Under such circumstances, the licensee has rights in the land of the licensor that, for practical purposes, are identical to the rights that might be embraced in an easement.
[2] Declarations

For developments not involving a large owner-retailer, such as a mixed-use commercial development, the implementation of a scheme for the common use and development of the project by future multiple owners is more likely to be achieved by a declaration of covenants, conditions, and restrictions (CC and Rs). The primary difference between a declaration and an REA is that an REA is a negotiated agreement among owners, while a declaration is not. The declaration is drafted and recorded by the original owner (declarant) of all of the real property slated for development. Thereafter, subsequent purchasers of individual parcels in the shopping center take their parcels subject to the declaration, absent an agreement by the declarant to amend or modify the original declaration. This is the same type of arrangement commonly used for residential subdivisions.