The economic fallout from the COVID-19 pandemic has caused commercial landlord and tenants to grapple with difficult business decisions and legal questions concerning their relationship. Currently, Pennsylvania landlords have little ability to pursue legal claims against defaulting tenants. The Pennsylvania Supreme Court recognizes that “the economic consequences of the COVID-19 pandemic may cause individuals to suffer a loss of income which in turn may delay rent payments [and] mortgage-loan payments” and issued an Emergency Order on March 18, 2020 that, in part, prohibits officers of the Court from effectuating “eviction, ejectment, or other displacement from a residence based upon the failure to make a rent, loan, or other similar payment.” This Order was extended to April 30th pursuant to the Supplemental Emergency Order issued by the Court on April 3, 2020, but may be continued. This Order, at this time, does not address commercial properties, but our firm will continue to monitor and update as needed.
Given these restrictions, landlords and tenants should consider how their respective leases allocated the risks associated with COVID-19, including interruptions in business operations. While landlords cannot currently have tenants evicted, they should consider what other legal remedies are available to them. Now is the time for parties to delve into their leases to determine how to protect their interests. This post focuses on some key lease provisions landlords and tenants should review as they navigate these uncertain times.
Additionally, the following two examples of lease provisions may come into play, but are likely to be a difficult burden for tenants to exercise, as these provisions would only apply in specific and limited circumstances.
For additional information contact Sloane O’Donnell.
April 09, 2020
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