The Unintended Consequences Of Rent Default

As we navigate through these uncertain times and face challenges like never seen before in the world of commercial leasing, landlords and tenants should be cautioned against the unintended consequences of their actions. The coronavirus crisis began with shutdowns all across the country, and sharp falls in revenues followed quickly thereafter. As soon as it became apparent that business-as-usual was turning into business-out-of-the-ordinary, tenants started assessing long term sustainability in a world subject to stay-at-home orders. Operations were shut down, some by law and others by necessity, but whatever the reason, the decline in business has led to the conclusion by many business owners that paying rent would now need to be reconsidered. Nonpayment of rent seemed justified under the circumstances however, as more and more tenants sent letters to landlords advising them that April rent would not be paid (and it was not known when they would resume paying rent