Post-pandemic, tenants are seeking to expand the scope of the force majeure clause. The so-called force majeure clause excusing a party to a lease from performing its duties if a catastrophic event beyond its control happens has long been a staple of commercial leases. But until recent times, it was largely regarded as boilerplate relegated to the back of the lease with all of the other supposedly inconsequential terms.
Consider four forms of compromise. For anchors and retail tenants with bargaining clout, the name of the game is drawing as many shoppers to the shopping center as possible. So, they’re apt to insist that the landlord refrain from renting to offices, educational facilities, and other non-retail tenants.
Allowing tenants to sublease the property they lease from you to third-party subtenants over whom you have no direct control carries a degree of risk. Since you don’t have a direct contract with the subtenant, you may be dependent on the tenant to enforce the terms of the sublease and have no direct way of compelling the subtenant to comply. An effective solution to this problem is to have the tenant assign its sublease enforcement rights directly to you. Here’s a strategic game plan, along with a Model Lease Clause you can use to deploy it.
