Williamsburg Climbing Gym Co. LLC and Fifth Concerto Holdco, Inc. v Ronit Realty LLC, No. 1:20-cv-02073 (E.D.N.Y. Check the force majeure clause: Here, the tenant`s goal is the same as that of the owner. Maintain a firm grip on rights and obligations. One of the ways commercial landlords and tenants can try to protect themselves is by paying attention to „force majeure“ clauses in their leases. A force majeure clause is a contractual provision that deals with extraordinary events beyond the control of the parties. As a general rule, these clauses provide that, to the extent that the event of force majeure does not render performance desirable, economically inapplicable, illegal or impossible or results in a delay in performance, the obligations of the interested party to perform a rental contract may be temporarily suspended or fully excused. 6. In the event that the property is encumbered by a debt, a landlord should review its obligations under its loan documents – for example, notification requirements if the landlord receives notices of force majeure from its tenants or sends notices of force majeure to its tenants; whether he must obtain the consent of his lender to modify the terms of an existing lease; and when it must provide copies of notices of defect sent or received by tenants. Trustees of Columbia Univ. v.

Edison Ballroom LLC, No. 156789/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (The plaintiff and defendant have reached an agreement for an event known as the „Lawyer`s Ball,“ which is scheduled to take place on March 28, 2020. The contract contained a force majeure clause stating that neither party is liable for non-performance and that each party is liable for the contract due to „force majeure or force majeure, including, but not limited to, force majeure, circumstances beyond its reasonable will, strike, government agency, terrorism, war.. In cases of force majeure, the defendant was required to „immediately reimburse 100% of all payments made to [the defendant], including the otherwise non-refundable deposit“. The defendant refused to reimburse the plaintiff`s filing even though the plaintiff was forced to cancel the event due to COVID-19 and government restrictions) (complaint of 26/08/2020) (response of 28/09/2020 with counterclaims) (response of 14/10/2020 to counterclaims) The Gap, Inc. v Ponte Gadea New York LLC, No. 1:20-cv-04541 (S.D.N.Y.

However, unless the commercial lease explicitly states „pandemics or pandemic events,“ it can be difficult to prove that COVID-19 meets the requirements of a force majeure event, unless the lease indicates that unexpected government action is an option. With government-ordered stay-at-home orders during the spring and summer months leaving many businesses out of service for some time, the pandemic could be seen as a force majeure event that prevented the parties from fulfilling their contractual obligations under a lease. Check the leases. Every lease is different and landlords and tenants should carefully consider their leases for the specific language of force majeure clauses, the right to rent reduction, conditions and other provisions that may be applicable in these difficult times. 5. Provisions relating to roommates/rights of darkness. In the retail sector, some mall tenants have roommate rights that allow them to reduce rent, cease operations, or terminate their lease if certain named tenants (typically anchor tenants and national retailers) or a percentage of the mall`s retail space do not remain open for business. Other leases may allow tenants to cease operations altogether if a percentage of other tenants are not equally open and in operation at certain times. In addition, some leases grant tenants the unlimited right to cease operations, although they generally have a continuing obligation to pay the rent until the premises are re-leased. Colocation losses often have a cascading effect, allowing tenants to use closures as leverage to secure a short-term deferral or rent reduction during the pandemic, as retail owners are motivated to maintain occupancy even if overall project rent revenues decrease significantly. 850 Third Avenue Owner, LLC v. Discovery Commc`ns, No.

654148/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (The plaintiff-landlord sued the defendant-tenant for unpaid rent after the defendant tenant remained on the property after the lease expired. . .

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