Legally Speaking: What You Need to Know About Commercial Lease Law

There are many things that go into choosing a site for a mall or a retail shop or any business. Location, location, location is the oft-heard mantra. Legal issues guide every single decision (or should, as lawyers will tell you) in the business process. The folks at Commercial Lease Law Insider tackled several thorny legal situations in their March 2021 edition.

Commercial Lease Law Insider provides the latest strategies for drafting and negotiating smart, owner-friendly leases using recent court rulings and real-world, expert experiences.

The featured article for the month of March 2021 is “Do Government COVID Business Closure Orders Frustrate the Purpose of a Commercial Lease?” It examines recent cases that demonstrate when tenants can and can’t use the pandemic-related orders as an excuse for not paying rent.

“The classic example is where a fire destroys the property after the tenant leases it. Theoretically, the tenant could continue to keep paying rent; but since the purpose for leasing the property in the first place has been frustrated, the tenant is excused,” the article notes.

But COVID can make things more complicated. In a case in New York, where businesses were forced to close as a matter of public health and safety, a high-end fashion retail tenant on the city’s Upper East Side stopped paying its rent, claiming the reduction of visibility among potential customers in a high-traffic area hurt its business. The tenant was sued by the landlord and the tenant asked the court to dismiss the case. The tenant’s request was denied, however, and the court found the tenant to be in “breach of lease and awarded the landlord back rent and legal fees.”

Not every case supported the landlords’ positions, however, the article goes on to recount a case in Massachusetts that supported the tenant’s argument. To read more about this and other pieces, download your complimentary issue of Commercial Lease Law Insider. You can also sign up for free industry eAlerts from CLLI by clicking here.

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