Much has been written about the plight of residential tenants who were unable to pay their rent during the shutdown. Less has been said about the business owners who had to let their employees go, modify their products and services in some way, or shut down with no idea of when they would reopen. Now, as states around the country are starting to reopen, protections put in place may be lifted.
Recurring actions regarding commercial tenants
Regardless of one’s circumstances, the economic impact of the COVID-19 pandemic is enormous. States are taking different approaches to commercial property evictions with some more hardline than others. Some actions that states have taken include:
- No actions: Staying executions of eviction during the shelter in place order.
- No court dates: Courts are only hearing priority one cases or those that they can address remotely, which will mean a backlog even when they reopen.
- Extensions: Some states are extending moratoriums on non-essential evictions to August and may extend further.
- Small businesses: These may enjoy additional protections if they meet certain size standards.
- Obligation is still there: Even if the tenant is relieved of monthly payment obligations, the landlord can still expect to collect that rent later.
Additionally, as many courts around the country have been closed during the pandemic, landlords have not had the venue to seek remedies against their tenants.
Finding a solution together
The lease agreement may not have provided a realistic remedy under the circumstances; however, the landlord and tenant can still negotiate a new agreement. or modify their existing lease agreement. Ideally, the new arrangement will be beneficial in that a landlord maintains a tenant for what could be an otherwise empty space, and the tenant has the opportunity to reactivate their business. Whatever solution that is agreed upon, the amended lease must remain subject to applicable moratorium laws.
An attorney will know the latest legal developments
The rules and their enforcement are a moving target as states and municipalities continue to address pandemic-related issues. Our attorneys can assist with the analysis of this updated information and help clients find solutions during these challenging times.