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What Happened: Another retail tenant has failed in its bid to use COVID-19 as an excuse for not paying rent. The tenant in this case was a New York City outlet of national retail chain The Gap, which claimed, among other things, that the pandemic and its resulting shutdowns constituted a “fire or other casualty” event rendering the premises unusable and relieving the tenant of its rent duties under the lease.

Ruling: T...

Q: Is there any benefit to letting a local charitable or nonprofit organization temporarily use vacant space in a center to collect donations, sell or distribute merchandise, or give out information about their programs?

What Happened: Like so many tenants affected by COVID-19, Saks Fifth Avenue stopped paying rent at its flagship New York City store. The landlord sued Saks’ parent company, the lease guarantor, for $2.7 million in unpaid rent. If these were normal times, we’d be liable for the tenant’s default, the guarantor acknowledged. But given the “unprecedented circumstances” of the pandemic, we didn’t breach the guaranty, it ar...

Renting office space to a corporate tenant requires some special handling of the typical assignment clause in a lease. Usually, an assignment clause requires the owner’s consent before the tenant may assign the lease. A corporate tenant may try to get around this by simply transferring their stock to the intended assignee. That is why smart owners insist on treating a major change in the tenant’s ownership as an assignment.

With most office workers able to work from home, the pandemic hasn’t hit office tenants—and thus their landlords—as hard as it’s hit tenants in the retail, restaurant, and hospitality sectors. But with employees productive at home, office tenants are reconsidering their need for office space.

In their eagerness to get the lease signed, brokers may be inclined to make statements about what the document says (or doesn’t say) to allay the concerns of one of the parties. So, what happens if the landlord or tenant takes the broker at its word and signs the lease, only to discover that the broker’s assurances were wrong? Does the party that relied on the assurances have a valid claim for fraud against the broker? A recent case from California sheds som...

Liquidated damages clauses can be a convenient way to incentivize performance and avoid disputes over the price tag of breaches. One common use of such clauses is to require the tenant to pay predetermined rent increases in the event it violates a covenant not to open a competing business within a specific radius of the leased property. But getting courts to enforce such a provision can be difficult, as illustrated by the scenario below.  

We polled our experts about what they’ve learned so far about lease renegotiations during the COVID crisis. Here are their top 10 takeaways:

1. Importance of Tenant Communication: Landlords were more likely to grant concessions to tenants that were able to clearly articulate their COVID-19 financial hardships.

On June 2, Commercial Lease Law Insider received the First Place Award for Best Business Newsletter, presented by the Specialized Information Publisher’s Association  at its annual conference.

The judges based their decision on 2019 issues in which our editor explained:

While each lease is different, COVID-19 generally doesn’t excuse tenants’ duty to pay rent. But, in times of pandemic, having the lease on your side may not count for much. The simple fact is that for many landlords, strict enforcement of lease rent obligations is not a realistic option; it might even be illegal under the emergency decrees of some jurisdictions.