Article by Stephanie Friese and Jennifer Garner on “Landlord/Tenant Disputes During COVID-19: Who Has the Upper Hand?”
In an article published on April 28, 2020 in Connect CRE, Stephanie Friese and Jennifer Garner discusses the landlord-tenant commercial real estate relationship amid the COVID-19 pandemic.
“In the context of COVID-19, there are very few, if any, lease provisions that would excuse the payment of rent,” explain Friese and Garner.” At the outset of COVID-19, many tenants were claiming reliance on force majeure clauses. These clauses excuse nonperformance of some lease obligations if an unforeseeable circumstance occurs and if that circumstance renders the party unable to perform, despite its best efforts.”
Friese and Garner further discuss whether typical protections afforded to renters apply in this scenario. “In the commercial context, absent a bargained-for benefit in the lease, such as a termination clause or abatement right, there are few protections afforded to commercial tenants with respect to financial obligations under the lease.”
There are other issues the pandemic is raising for landlords, including how to respond to tenant requests for rent relief. “Landlords are struggling to balance the lack of any legal obligation to grant rent relief, with the desire to have portfolios as stable as possible,” said Friese and Garner.