Bowers Harrison, LLP Secures Major Rezoning in Evansville

Bowers Harrison, LLP secured a major rezoning for 13 acres of undeveloped land located at the intersection of East Virginia Street and Kimber Lane, between Burkhardt Road and Green River Road on Evansville’s East Side.

The rezoning was recommended for approval by the Evansville Area Planning Commission on January 9, 2014, and was unanimously approved by the Evansville City Council on February 10, 2014. The property was successfully rezoned from a Residential District (R-1) to a General Commercial District (C-4), with a use and development commitment restricting those uses classified in Use Group 21 (see Section 18.125.240 of the Evansville Municipal Code for more information). 

Obtaining the necessary zoning or permits for a development project can be very challenging, if you do not have an experienced real estate attorney to navigate you through the process. Zoning and land use ordinances are complex and constantly changing. Securing a rezoning requires special knowledge of local procedure as well as relevant zoning and land use laws. 

The Real Estate and Title Services Department at Bowers Harrison LLP is highly experienced in working with clients on complex commercial zoning, land use, and real estate development projects throughout Southwest Indiana. If you are in need of representation in any zoning, land use, or real estate development matter, please contact us at (812) 426-1231

Wells Fargo Lowering Credit Score Requirements for FHA Loans

This week, Wells Fargo announced that it is lowering its credit requirements for loans backed by the Federal Housing Administration (“FHA”).

Prior to this change in policy, the minimum FICO credit score that Wells Fargo required for an FHA loan was 640. Effective February 2014, Wells Fargo will accept FICO scores as low as 600.  This will allow the company to offer mortgage credit to a broader base of consumers.

In 2013, Wells Fargo was among several other large banks to reach a major settlement with Fannie Mae and Freddie Mac over bad loans. In December 2013, Wells Fargo agreed to pay Fannie Mae and Freddie Mac $591 million to resolve “repurchase claims,” which related to the faulty mortgages that Wells Fargo sold to Freddie Mac in the years preceding 2009, totaling $869 million. Reaching this settlement has allowed the company to spring forward.  In fact, in its most recent earnings release, the lender posted record earnings!

Is this a sign that the housing market is finally recovering?

If you have any questions about this article or any other Real Estate or Title Services issue, please contact us at (812) 426-1231. 

Poorly Drafted Shopping Center Lease Allows Tenant To Terminate Lease Early and Vacate Premises Without Giving Landlord Notice

The Indiana Court of Appeals recently held that a Hendricks County shopping center tenant, the retail chain Claire’s Boutiques, Inc. (“Claire’s”), properly exercised its option to terminate its lease by vacating the shopping center without giving the Landlord prior notice.  In reaching this conclusion, the Court of Appeals reversed the lower courts judgment in favor of the shopping center owner, Brownsburg Station Partners (“Brownsburg”). 

In 2007, Claire’s and Brownsburg negotiated a lease, which included a co-tenancy provision providing that Claire’s could terminate the lease, if “the Shopping Center’s occupancy level falls below 70%” (“Co-tenancy Provision”.) On June 14, 2009, Claire’s stopped paying rent, removed its personal property, and vacated the premises without providing notice to Brownsburg.

In response, Brownsburg sent Claire’s a notice of default and filed a complaint for breach of lease in July 2009. At issue was the interpretation of the Co-tenancy Provision language. Claire’s argued that the provision provided that Claire’s could terminate its lease if less than 70% of the total units available were occupied. Brownsburg argued that the Co-tenancy Provision provided that Claire’s could only terminate its lease if less than 70% of the total leasable area was occupied.

The Trial Court found that the Co-tenancy Provision language was ambiguous, sided with Brownsburg, and held that in order for Claire’s to terminate the lease, less than 70% of the total amount of leasable area must be occupied. Thus, Claire’s had no option to terminate its lease and, therefore, violated the lease by failing to pay rent and vacating the premises prior to the lease termination.

On appeal, the Court of Appeals reversed and found that the lease language was not ambiguous. Brownsburg argued that the parties did not intend for this provision to mean 70% of the units were occupied, but rather, as evidenced by other provisions of the lease, the parties meant for this provision to refer to leasable area. The court reasoned that “[w]hen interpreting a written contract, the court should attempt to determine the parties’ intent at the time the contract was made, which is ascertained by the language used to express their rights and duties.”  Further, “the first rule to be applied is the plain meaning rule. . . . When the terms of a contract are clear and unambiguous, they are conclusive, and courts will not construe the contract or look to extrinsic evidence.” The Court relied heavily on the fact that the co-tenancy lease provision began with the language “[n]otwithstanding anything to the contrary contained in this Lease,” thus, precluding consideration of other conflicting provisions. 

In addition, the Court of Appeals held that Claire’s properly exercised its option. Although Claire’s simply stopped paying rent and vacated the premises, the court reasoned that the lease did not define “termination.” Thus, Claire’s was not required, under the lease, to provide any advance notice that it was exercising its termination option, and Claire’s properly exercised its termination option under the co-tenancy provision.

This case demonstrates the importance of good lease drafting. If the lease was clearly written, with key terms, such as “termination,” properly defined, both parties could have saved the expense (and the headache) of litigation.  If you have any questions about lease drafting, or any another real estate matter, please contact us at (812) 426-1231.


The default and remedy clauses in commercial purchase and sale agreements are often treated as boilerplate provisions and not given adequate consideration or scrutiny. At the time of drafting a purchase and sale agreement, default and potential remedies are not at the forefront of the issues the purchaser and seller are considering and negotiating.

The default and remedy provisions are a critical part of any purchase and sale agreement and should be given careful consideration by both purchaser and seller. Both parties are at risk of default under the purchase and sale agreement and exposure to a number of potential remedies, including specific performance, monetary damages and other legal or equitable remedies. The time to address default and remedies is prior to execution of the purchase and sale agreement, but frequently the purchaser and seller do not give these provisions consideration until problems arise and there is a dispute between the parties.

Once a default has occurred it is not the time you want to first consider the default and remedy provisions of the purchase and sale agreement. Careful evaluation of possible defaults and the potential remedies is critical in the negotiation of the purchase and sale agreement.

If an event of default does occur under a purchase and sale agreement, good counsel is important to maximize the recovery for the non-defaulting party or protect the defaulting party against excessive damages. The enforcement of remedies under a purchase and sale agreement will present numerous legal and practical challenges to both the defaulting party and non-defaulting party.

We regularly assist clients in negotiating default and remedy provisions as well as all other aspects of purchase and sale agreements and commercial real estate transactions. Our focus is to get the deal done while protecting our clients' interests during contract negotiation and, if necessary, remedy enforcement.  If you need assistance in connection with a commercial purchase and sale agreement or any other aspect of a commercial real estate transaction, please contact the author, Christopher L. Lucas, or the Bowers Harrison attorney with whom you usually work.