Commercial Leases and COVID-19: What You Need to Know
The COVID-19 pandemic has forced businesses to close their doors, make arrangements for altered hours, comply with orders regarding social distancing, and a lot more. Changes are happening quickly, and every shift a business makes has wide-ranging effects, from its clients to its landlord.
Every commercial rental agreement should be governed by a written lease that sets out the terms and conditions of the contract. When dealing with potential payment or other lease violations, the first place you should look to consider your remedies as a commercial landlord or tenant is the lease language itself.
Below is a quick outline of some of the most relevant terms and conditions likely found in a commercial lease that may be triggered based on conditions created by COVID-19. Any of these could be the subject of commercial litigation.
Force Majeure Clauses
A force majeure clause will generally temporarily excuse performance in certain extreme circumstances, such as:
- Certain natural disasters
- Governmental acts
- Civil disturbances
- Public health emergencies
The language of the contract will rarely address a pandemic specifically, but if a governmental action forced a closure, for example, the force majeure clause might be triggered. In many cases, the extreme circumstances are limited to the specific list in the contract.
Some clauses include language that references an “act of God.” Right now, it is unclear whether the pandemic could be considered an “act of God” to trigger the force majeure clause for commercial contracts in Oklahoma.
Many commercial leases contain clauses that the business cannot abandon the property or close for a specific amount of time. However, these clauses run contrary to stay-at-home orders or closures of certain types of businesses.
Commercial landlords can choose to waive these requirements for a short time. On the other hand, they can also choose to use it as grounds for termination of the lease. However, many leases have clauses that indicate that the tenant cannot violate applicable laws. Sorting out these conflicting provisions can be difficult and may trigger litigation.
Violation Remedies: Restrictions on Evictions
While eviction restrictions have been lifted across most of Oklahoma, including Oklahoma City, there was a time when evictions were not permitted due to COVID-19. Now that evictions are again permitted, landlords can take action against those commercial tenants who have violated their commercial leases within the past several months.
The lawyers at BROWN & GOULD PLLC have a reputation for aggressively pursuing matters, no matter how challenging they may be. If you are facing potential commercial litigation because of a lease, contact our team to help assert your claim or defend you in a lawsuit. We are here for you when you need us most.