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Business Lease Agreement During Covid

Force majeure clauses in lease agreements will be crucial given the considerable impact of COVID-19. These provisions temporarily excuse non-compliance by a party in the case of certain extreme events (a “force majeure case” each). Depending on the wording of the applicable language, the tenant may be excused in case of force majeure for a fixed period or for an indefinite period of time for the performance of the obligations incumbent on him under the rental contract. Obligations to pay rent and other sums in the rental agreement are often, but not always, deducted from the force majeure clause. COVID-19 is a new legal area in the interpretation of commercial leases and a lessor`s decision to enforce obligations should be carefully considered in light of the language of the lease and other relevant real circumstances. Tenants are strongly discouraged from taking unilateral measures, such as withholding rents or evacuating premises, without (a) carefully reviewing the lease and (b) consulting a lawyer, as they may inadvertently breach their obligations. However, some owners/creditors may not be ready to make such a proposal. This may leave some tenants with no choice but to apply for urgent lease concessions, an assignment of leasing by agreement or any form of management or other insolvency proceedings. Check your rental agreement to see if you are legally required to pay rent and additional rent (e.g.B property taxes, incidentals, etc.). If you can`t pay your rent, you can talk to your landlord to renegotiate your lease, negotiate a payment plan, or reduce your rent. Make sure that any agreements made with the owner are in writing. For legal assistance in your commercial lease agreement, please contact the Legal Aid Society`s Community Development Project at (212) 426-3000 or communitydevproject@legal-aid.org Continuous Operations Covenants or prohibitions on “sinking” given state restrictions on business activities and restrictions on meetings The amendments are intended to assist commercial owners, tenants and borrowers through the COVID-19 situation.

They are relieving businesses to help them stay solvent during the pandemic, which will help New Zealand`s economic recovery. They are part of a wider package of State aid to businesses. Information on the government`s COVID 19 economic package and business support is available on the Ministry of Finance`s website and on the government`s covid 19 website: COVID-19 will inevitably have an impact on the real estate sector and how leases will be structured and negotiated in the future. All current and future leases will be more individualized, paying particular attention to state rules, timing, reduced budgets and, of course, force majeure language. Covid-19 given that covid-19 poses other challenges, both landlords and tenants could consider changing their current leases as compromising efforts to stay afloat. Often, force majeure clauses have an obligation to terminate. To benefit from the force majeure provision, you may only have a specific period to notify the tenant as soon as the force majeure event occurs. Be sure to check your lease. Given the magnitude of the outbreak and the unique economic context, it is possible that the effects of the coronavirus, depending on the facts of each case, will find successful claims of frustration. However, potential complainants may be faced with arguments that, at the time of the lease, public health issues were not so far removed from the parties` thinking that they could not have negotiated lease terms to spread the risks involved; and that any inability to occupy premises would only apply for a short period of time (in relation to the term of the lease) and not to a permanent agreement. .

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