Monday, March 23, 2020

A First Look at Legal Issues in Leases, Thanks to Coronavirus

Commercial Observer
Property owners and tenants have been calling their lawyers with lots of questions about today’s global pandemic. Here is a quick overview of many of those questions, and the answers we are generally giving. All of this, however, is new territory. The legal summaries here should not be relied upon. Each situation depends on its specific circumstances, including, above all, the wording of documents. But the issues and exposures are all genuine.

Rent Holiday? Many tenants face a complete elimination of revenue for an extended time, yet their lease continues, including the obligation to pay rent. Even if they have cash reserves, which most small tenants don’t, they want to hold on to cash as much as possible. Many tenants have been opening conversations with property owners, requesting rent relief. A rent deferral doesn’t help; it just defers the pain.. . . more