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A Primer on Lease Agreements for Small Businesses

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The current COVID-19 crisis has caused a dramatic upheaval in commercial leasing. As government shelter-in-place order shut down large sectors of the economy, the inability to operate business as usual directly impacts the tenant’s ability to pay rent across the country. Most leases contain “force majeure” clauses which are triggered by a natural disaster or an “Act of God.” However, these clauses are not necessarily applicable in the COVID-19 pandemic, and do not excuse a tenant’s obligation to pay rent.

If a tenant finds itself unable to pay rent, a better solution would be to amicably communicate about the issues and avoid dispute over the lease terms. This can mean the landlord and tenant negotiating a payment plan that would either reduce rent, defer payment until a later date, or suspend rent until business starts up again. Landlords likely want to keep a good tenant and will try to arrange a plan to keep them long term.  See Section III for tips on working through a landlord-tenant dispute. 


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Chicago, IL 60602

info@mauckbaker.com

312-726-1243

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The information contained here has been prepared for informational purposes only and is not legal advice. This material describes issues in general terms, and good legal advice required detailed analysis of particular facts and circumstances. We welcome the opportunity to discuss legal representation with readers of this content. However, the publication of this content is not intended to create, and receipt of the same does not create, an attorney-client relationship. We accept clients only after considering potential conflicts of interest and confirming the terms of our engagement in writing. We render legal advice to clients only after the completion of those procedures. Do not send confidential information until you speak with one of our attorneys and obtain authorization to send such information.