Commercial Lease Agreements Covid

Commercial Lease Agreements During COVID: What You Need to Know

The COVID-19 pandemic has brought about a lot of changes in our personal and professional lives. One of the areas that has been significantly impacted is the commercial real estate industry. As a business owner, it`s essential to understand how the pandemic has affected commercial lease agreements and what you can do to protect your interests.

1. Force Majeure

Force majeure is a clause found in most commercial lease agreements. It refers to unforeseen circumstances that prevent a party from fulfilling their contractual obligations. The COVID-19 pandemic is a perfect example of a force majeure event. If your lease has a force majeure clause, it may allow you to terminate the lease or negotiate revised terms. However, it`s essential to read your contract carefully and understand the terms of the clause.

2. Rent Relief

COVID-19 has caused many businesses to struggle financially. If you`re having difficulty paying rent, you may be able to negotiate rent relief with your landlord. Some states have implemented rent relief programs, and some landlords have voluntarily offered rent relief to their tenants. Communication is key, so reach out to your landlord to discuss your options.

3. New Lease Terms

The pandemic has forced many businesses to adjust their operations and the way they do business. As a result, some companies are looking to renegotiate their lease terms. For example, you may want to add a clause that allows you to terminate the lease early if there`s another pandemic or similar event. You may also want to include language that allows you to sublease the space if your business model changes.

4. Subleasing

If you find yourself with excess space, subleasing may be an option to consider. Subleasing allows you to rent out the space to another tenant. However, before you do this, make sure that your lease allows for subleasing, and get approval from your landlord. You may also want to consider consulting with an attorney to draft a sublease agreement.

5. Lease Termination

If you`re unable to negotiate new lease terms with your landlord, you may want to consider terminating your lease. However, breaking a lease can be costly, so make sure that you understand the consequences of doing so. Review your lease carefully and speak with an attorney to decide if this is the best option for your business.

In conclusion, the COVID-19 pandemic has created a lot of uncertainty for business owners. If you`re facing challenges with your commercial lease agreement, it`s important to communicate with your landlord and understand your options. By doing so, you can protect yourself and your business during these challenging times.