COVID-19 Crisis –
COVID-19 is wreaking havoc in every area of life. This includes making it difficult for people to pay their rent. Many states and local municipalities have bannedeviction proceedings even if people are unable to pay rent. Courts arealso closed in many areas, so there is no way for landlords to pursue evictions. But this does not mean that there will not be problems when rent comes due and someone is unable to pay it. What do you need to know about COVID-19 and looming rent payments?
Start by reviewing your leas. Your payment obligations will be listed in detail, but chances are the information will not address a viral pandemic. However, under the miscellaneous section, you might find some information about lease provisions.
- A requirement that rent be paid without deduction
- The ability of the landlord to shut down the building in an emergency without abatement of rent
- Monetary obligations
- Operating covenants and what happens if they are breached
- Tenant rights if they are unable to access the building and guarantee access to the premises
- Condemnation or casualty provisions that extend to a loss of access or use as a result of governmental action
It is also a good idea for landlords to review their loan documents and determine what their rights are. Also, review your insurance regardless of whether you are a landlord or tenant to see what coverage might be provided in a situation such as the one the world is facing. There might be rent loss coverage or business interruption coverage available.
Pay Attention to Frequent Government Updates
In addition to knowing where you stand with your lease and other legally binding documents, it is also important to stay up-to-date on the latest developments regarding the virus and your state’s Stay at Home orders and other directives from the government.
Make sure you understand how these things can impact your business and your living arrangements.
Could your landlord be required to close the building? Will stay evictions and other moratoriums have an impact on your situation?
The best thing you can do in a time like this is to understand and preserve your rights. Make sure you are clear on what is expected of you and if you are a landlord, let your tenants know what they can expect and what you want from them.
It is also a good idea to realize that how you deal with this situation will affect your relationship in the future. If you want to continue to live somewhere, make a good faith effort to communicate with your landlord about your financial situation. And if you want to keep tenants make sure you are working with them during this time. The more parties can come together and cooperate throughout these challenges the easier it will be to return to “normal” once it is over. Any resolutions or agreement you reach during this time should be put into writing.