Here is an article to understanding the key aspects of post-pandemic commercial lease disputes that property attorneys have been handling:

Force Majeure Clauses: Force majeure clauses became central to lease disputes during and after the pandemic. These clauses typically excuse performance when extraordinary circumstances prevent parties from fulfilling their obligations. However, many pre-pandemic force majeure clauses didn’t explicitly mention pandemics or government-mandated shutdowns, leading to complex legal interpretations.

Lease Modifications: Property attorneys have been working on:

1. Rent abatement agreements and temporary modifications
2. Renegotiating terms to reflect changed market conditions
3. Documenting permanent lease amendments
4. Addressing changed space requirements as businesses adopted hybrid work models

Tenant Rights Issues: Key areas of focus include:

1. Constructive eviction claims related to building safety measures
2. Disputes over common area maintenance charges during reduced occupancy
3. Questions about security deposit returns and application
4. Negotiations around early lease termination rights

A significant number of these disputes have centered on whether pandemic-related business disruptions legally excused rent payment obligations, even when force majeure clauses were silent on pandemics. Courts have generally examined:

• The specific lease language
• State and local laws
• The nature and extent of government restrictions
• The actual impact on the tenant’s business operations

Article Summary:

Post-Pandemic Commercial Lease Disputes: Key Issues and Legal Considerations

Force Majeure and Impossibility of Performance

The pandemic prompted unprecedented interpretation of force majeure clauses in commercial leases. Property attorneys have been navigating:

• Whether COVID-19 qualifies as a force majeure event under existing lease language
• The intersection between government-mandated closures and force majeure provisions
• The duration and scope of force majeure relief
• Requirements for notice and documentation of force majeure claims
• Whether impossibility or frustration of purpose doctrines apply when force majeure clauses are absent

Rent Relief and Modification Disputes

A significant portion of post-pandemic disputes center on rent modifications and relief agreements:

• Enforcement of temporary rent relief agreements made during peak pandemic periods
• Disputes over repayment terms for deferred rent
• Interpretation of percentage rent provisions during periods of reduced operations
• Reconciliation of operating expense payments during reduced occupancy
• Compliance with documentation requirements for PPP loan forgiveness related to rent

Use Clauses and Operating Requirements

The pandemic has created ongoing disputes regarding:

• Whether required continuous operations clauses were violated by government-mandated closures
• Modification of use clauses to accommodate changed business models
• Compliance with health and safety protocols as they relate to use provisions
• Impact of reduced foot traffic on co-tenancy requirements
• Interpretation of exclusive use provisions in light of changed business operations

Property Maintenance and Common Areas

Novel issues have emerged regarding:

• Responsibility for implementing and paying for enhanced cleaning protocols
• Disputes over operating expense allocations for COVID-19 related modifications
• Liability for health and safety measures in common areas
• Changes to common area maintenance obligations during periods of reduced occupancy
• Cost sharing for physical modifications required by health regulations

Insurance and Indemnification

Complex questions have arisen about:

• Coverage for business interruption losses
• Interpretation of civil authority provisions in insurance policies
• Allocation of liability for COVID-19 exposure claims
• Requirements for additional insurance coverage related to pandemic risks
• Indemnification obligations for pandemic-related claims

Default and Remedies

Attorneys are addressing:

• Modified notice and cure periods for defaults during pandemic conditions
• Alternative dispute resolution requirements before exercising remedies
• Impact of bankruptcy filings on lease obligations and remedies
• Enforcement of personal guarantees for pandemic-related defaults
• Application of security deposits to pandemic-related defaults

Looking Forward: Lease Drafting Implications

The experience has led to significant changes in lease drafting:

• More specific force majeure provisions addressing pandemics and government orders
• Detailed provisions for rent relief and modification procedures
• Clear allocation of costs for future health and safety requirements
• Modified operating covenants with pandemic-related carve-outs
• Enhanced insurance and indemnification requirements

Regulatory Compliance

Ongoing attention to:

• Compliance with state and local emergency orders affecting commercial tenancies
• Implementation of evolving health and safety requirements
• Documentation requirements for government assistance programs
• Changes to eviction and collection procedures
• Reporting requirements for lease modifications

Settlement Strategies

Property attorneys have developed approaches for:

• Structured settlements incorporating contingency provisions
• Creative solutions for space sharing and alternative use
• Integration of government assistance program requirements
• Documentation of COVID-19 impacts for future reference
• Long-term modification of lease terms to address changed circumstances