As major cities and states across the U.S. have lifted or are set to lift COVID-19 restrictions in the coming weeks, we want to take this time to look back at Ravid Law Group’s analysis of the past year’s COVID-19 cases. With mixed results, it is still anybody’s guess how a court will ultimately decide whether all or some of the rent will be considered due for the periods of time that governments imposed occupancy restrictions. Meanwhile, the retail industry, left for dead in 2020, has come roaring back to life in 2021, with new deals reaching heights not seen in recent memory. Record sales are prompting more and bigger deals throughout the country. Everyone is busier than ever before. With that in mind, Ravid Law Group is hiring. Please submit your resumes to [email protected].
On a separate note, we also want to take the opportunity to invite you to attend the Los Angeles County Bar Association program “Reflections on ‘The Color of Law: A Forgotten History of How Our Government Segregated America.'” Ravid Law Group is a proud Sponsor. The event is free and open to all. Register here.
Ravid Law Group COVID-19 analysis 2020-2021:
COVID-19 has caused major disruptions in the business world, perhaps most severely in the retail industry.
This program covered both landlord and tenant issues triggered by the COVID-19 pandemic, including whether rent is due, potential legal defenses, construction delays, rent deferral/forgiveness agreements, enforcing defaults, state and local eviction moratoriums, government loan programs, business interruption insurance, and drafting lease clauses post-COVID-19.
Our annual survey of the top retail brokers throughout the country on where the real estate market is headed.
In one of the first cases to consider the question of whether force majeure excuses the payment of rent following the outbreak of the COVID-19 pandemic, the United States Bankruptcy Court for the Northern District of Illinois held that a lease’s force majeure clause does excuse—at least in part— a tenant’s obligation to pay rent under Illinois law.
The pandemic has hit the U.S. economy hard – shrinking it by nearly a third in the second quarter of 2020. Perhaps no other industry has suffered as much as retail.
As businesses continue to grapple with the severe impacts that COVID-19 has had on their operations, many have turned to their insurance policies for help, only to be surprised that in most cases their business interruption insurance does not actually cover what is likely the biggest interruption their businesses have ever seen.
A New York court once again rejected a tenant’s argument that it was excused from paying rent due to circumstances surrounding the COVID-19 pandemic.
In many lease negotiations prior to 2020, force majeure provisions were an afterthought—relegated to the miscellaneous section at the very end of the lease; the language a mere formality that required little discussion.
As COVID related lawsuits continue, what is beginning to emerge is a framework of cases addressing the question of whether rent is still due under commercial leases, with sometimes inconsistent conclusions.
As more decisions come out, some courts are finding that these tenant defenses do raise questions of fact—suggesting that it is likely that the tenants will ultimately prevail and be excused from paying some, if not all, of their rent.
The ongoing question of whether COVID-19 excuses a tenant’s obligation to pay rent took another turn when the Superior Court of Massachusetts in Suffolk County ruled that a restaurant tenant did not have to pay any rent during the three-month period that it was prohibited from providing indoor dining due to a government order.
Last month, in one of the latest COVID-19 related lawsuits to trickle through the New York courts, a New York Supreme Court held in favor of the commercial tenant.