18.16 Shopping Center Agreements


In General

In a shopping center, its management and the anchor stores have interrelated rights, obligations, needs, licenses, options privileges, easements and restrictive uses in connection with:

  • Utility services
  • Maintenance
  • Access between the mall building and the anchor stores
  • General functioning
  • Parking accommodations
  • Other related items

Generally, arrangements for the above purposes are set forth in rather complex agreements which are referred to as "operating agreements", "shopping center agreements", "reciprocal agreements", or "reciprocal easement agreements."

These agreements are always executed, acknowledged and recorded as any other instrument affecting real property and they are of such importance to the respective parties that it is common for said parties and their mortgages to request that their rights under the "agreements" be included in the real property estates and interests to be insured.


Insurance Of The Shopping Center Operation Agreement

The insurance of all the rights and interests under a "shopping center agreement" is not appropriate because many of the rights, powers, privileges, licenses, options, etc. contained in the agreements are not within the scope of the title insurance policies.

On the other hand, many easements and rights created or established by the agreements are perfectly insurable real property interests.

The method of insuring these easements and rights or issuing affirmative coverage in regard to the "operating agreement" may vary according to either regions or specifics of the transactions.

The most common methods of insurance are the following:

  • Insurance of appurtenant easements or other interests created by the "operating agreement" for the benefit of the property being insured.

    Ordinary appurtenant easements for ingress and egress, utility installation and maintenance may be insured in accordance with the procedures for the insurance of appurtenant easements (see "Easements" 5.00).

  • Affirmative insurance against loss by reason of any defect or deficiency in the execution of the "operating agreement" by all parties owning any estate or interest in the land at its date.

    Also, that there are no defects, liens, or encumbrances on the land affected or benefited by the "operation agreement" except those shown or referred to in Schedule B.

    This type of coverage is issued through an endorsement and in some instances, it is expanded to cover matters of "subordination" and "specific use."

  • Affirmative insurance that an improvement within a shopping center site and the use thereof does not violate provisions of the "operating agreement."

    This type of coverage is issued through an endorsement and it needs to be tailored to cover the matters under consideration.