Working Through Commercial Landlord/Tenant Issues during the Pandemic
The real estate practice group at BB&L experienced an unprecedented year as commercial landlords and tenants worked to navigate through the pandemic and government-mandated closures. Most commercial leases did not contemplate pandemic-related closures and insurance policies meant to protect landlords and tenants during such closures had viral exclusions, specifically excluding losses due to a pandemic.
To stave off mounting losses and creditors, tenants asserted the right to abate or defer rent during such closures and advanced equitable arguments to support such right, and understandably, landlords, with competing interests and held to account by lenders, were forced to counter these arguments against a backdrop of legal uncertainty and eviction moratoriums.
While neither party was to blame for the pandemic, landlords and tenants were quickly embroiled in a dispute over the non-payment of rent during periods of closure. This set the table for negotiations more adversarial than usual, and during the early days of the pandemic, the real estate practice group prepared countless letters advancing legal arguments in support of our clients’ positions. As landlords and tenants came to an impasse and litigation appeared imminent, fortunately, there was a shift towards compromise as a means of enduring the pandemic. Landlords and tenants started working together to find mutually acceptable resolutions. The cost-benefit of surviving the pandemic with a landlord-tenant relationship intact outweighed the uncertainty and cost of litigation.
Representing both national and regional landlords and tenants, the real estate practice group at BB&L advised our clients on how best to accomplish a resolution with the other party and has since negotiated and drafted hundreds of amendments to memorialize these resolutions. While the pandemic has proven unrelenting, landlords and tenants are still working together to find common ground. It is our hope that the new year will bring an end to this pandemic and that landlords and tenants will benefit from their decision to compromise and work together during such challenging times.
Please Note: This document does not constitute legal advice. Please consult an attorney for legal advice on what to do in a particular situation.