Commercial Landlord and Tenants Issues Due to COVID-19. As of April 1, 2020, commercial tenants will be required to pay their regular monthly rental payments. However, as a result of the COVID-19 pandemic, many of these same tenants will be working under reduced hours, or not at all, thereby impairing the ability to generate enough revenue to pay monthly bills, including rent. And while the tenant may not be able to pay its monthly rent, this impairs the landlord’s ability to pay their monthly mortgage.
In this situation, both parties must review the current lease agreement to determine the rights and responsibilities of each party. Also, both the tenant and the landlord should establish whether or not there may be available insurance coverage, such as business income and loss of rents, and what type of relief may be available under the CARES Act. After reviewing all options, the best-case scenario is for both the landlord and tenant to reach a mutually agreeable resolution, at least for the short term. Of course, if there is an agreement reached, it should be documented appropriately. However, if an agreement is not able to be reached, each side must review their options, which may include the commencement of an eviction action, a bankruptcy filing, and possible litigation. There are costs and benefits to these approaches, and it is essential to weigh all options and choose the best choice for your needs.
At MBW Law, LLC, we specialize in commercial landlord/tenant matters, insurance coverage matters, and general civil transactions and litigation. We are offering a no-cost, initial consultation, to help you assess your options. We are here to help and would certainly welcome the opportunity to do so.