Office Tenants of All Sizes Are Asking for Rent Relief. Some Institutional Owners Are Offering Them Deferrals
“This is not the time to negotiate for the last nickel,” stresses one source, as tenants and landlords both need to survive.
April 15, 2020 | Patricia Kirk | National Real Estate Investor
With the COVID-19 shutdown interrupting business operations across a large swath of industries, office tenants have begun seeking rent relief. For example, Kenneth S. Fields, Los Angeles attorney at law firm Greenberg Glusker, says his office tenant clients are asking if they can stop paying rent, and landlord clients are seeking advice on what to do if tenants stop paying.
Whether an office landlord can evict a tenant for non-payment of rent or if the tenant is legally responsible for paying rent during the shutdown depends on what’s written in the lease, Fields notes. So, both parties should review their leases to determine how the documents address the current situation, if at all.
For example, a “force majeure” clause in a lease absolves tenants from paying rent when an “Act of God” or an insurmountable man-made interference prevents their ability to meet contractual obligations, so the coronavirus qualifies as force majeure, according to Fields.
