Force Majeure In A Lease Agreement

It is therefore important for tenants and landlords alike to verify their leases. If there is no such clause, it depends on the mutual relationship, the nature of the economy, the likely effects of Covid-19 and the ability to negotiate. Causes related to a case of force majeure and how cause-and-effect considerations may affect force majeure cases in COVID-19 land. Look at the insurance coverage. Landlords and tenants should check the specific conditions of their policy. Service interruption insurance and local default insurance may not necessarily be available for pandemics, and there will likely be barriers to obtaining coverage due to disruptions caused by COVID-19. However, some states are considering legislation that would require insurers to pay service interruption fees to COVID-19, and landlords and tenants should be informed of these developments. The decision does not answer many questions. How will the courts formulate broader force majeure provisions that do not specifically refer to government actions? Similarly, the decision does not specify what happens when the impact of a home residence order is less clear. Furthermore, it is not clear how a court could make a provision for a force majeure case during the COVID 19 pandemic, outside the context of an executive order stay at home. Is the pandemic enough to trigger a change in force majeure? Finally, since States are beginning to allow the reopening of businesses, but with restrictions such as capacity restrictions, what are the consequences on a force majeure provision? Similarly, Hitz Restaurant Corp.`s argument leaves this question unanswered and remains to be considered in the future. Such problems are abundant, as commercial rental properties come from the COVID-19 quarantine. An informed and determined response and an understanding of the importance and intent of typically opaque contractual clauses such as force majeure will be crucial for successful tenants and landlords in 2020.

With respect to the first issue, if there is a specific clause in the tenancy file stating that the rights and obligations of the parties as well as the terms of the agreement/Facts remain suspended in the event of a “force majeure” including epidemics, pandemics or diseases, the tenant may invoke this clause to obtain a reduction in rent. DHG Mgmt. Co. v. French Partners LLC, et al., No., 654319/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (tenant of the plaintiff for breach of the lease agreement, which provided that the lessor would give the tenant access to the leased property seven days a week.

Plaintiff-tenant argued that this promise was made, not only with respect to the landlord, but with respect to the “world.” When the state closure took place, the lessor claimed that it was a force majeure event, which overturned the owner`s obligation to grant consistent access to the rented premises.