The pandemic is an unprecedented event in modern history, and current commercial leases don’t have any provisions to properly address it. Real estate attorneys at Nixon Peabody are already looking at how commercial leases can and need to be refined to respond to future events of this magnitude.

“The story is still being written, but there is no doubt that there will need to be refinement of existing provisions, and more likely than not, depending on the types of properties we are talking about, additional provisions to address the ability to pay rent as the result of a pandemic,” Justin X. Thompson, an attorney at Nixon Peabody, tells GlobeSt.com.

There have been some attempts to use force majeure in other contracts, but those generally don’t apply to lease deals or rental payments, not to mention other regulations created quickly to respond to the outfall. “A lot of people like to go to the force majeure provision, but we have found that a lot of times, those provisions aren’t really applicable to the payment of rent itself,” says Thompson. “It is typically excluded from that provision. What we are dealing with is not something, at least in the modern era, that we have had to face on the landlord-tenant front.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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