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Can't Pay Rent During COVID-19? Here's How to Negotiate

“A standoff with tenants could result in tenant default and eviction, or it could lead to more constructive negotiations between tenant, owner and lender,” according to NAOIP.

Real estate experts are recommending property owners question the legal basis for tenants to not pay rent due to the COVID-19 pandemic, and that tenants come to the table prepared to negotiate on terms for future payments.

In a recent report from NAIOP, those involved in similar negotiations said some tenants are citing the pandemic—which has forced business closures and other significant economic hardships—to invoke the “force majeure,” or “act of God,” clause in their rental agreements. That clause can allow parties to renege from an agreement due to circumstances beyond their control, frequently events like natural disaster.

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Jacqueline Thomsen

Jacqueline Thomsen

Jacqueline Thomsen, based in Washington, is a reporter covering D.C. federal courts and the legal side of politics. Contact her at [email protected] and follow her on Twitter @jacq_thomsen.

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