Originally published on Ron Derven in NAIOP's Summer 2020 Issue
Flexibility is a must, but document everything as specifically as possible.
All the legal precedent in the world won’t solve the problem of tenants who cannot pay their rent, such as restaurants or businesses forced to lay off all their employees because they have no revenue in the aftermath of coronavirus-related shutdowns.
“It is impossible for lawyers to predict how courts are going to rule on these issues in the future as defaults from COVID-19 situations begin to work through the judicial process,” said attorney George Pincus of Stearns Weaver Miller, P.A., in Fort Lauderdale, Florida, during a recent NAIOP webinar.
Pincus said many large national retail tenants are informing landlords that they are not going to pay rent for the foreseeable future and claiming impossibility of performance and force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract). Pincus said if a landlord receives such a letter, they must assert their rights immediately.