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COVID-19 and the massive efforts being made to prevent or delay its spread can potentially affect tenants and their landlords in many ways, including full or partial building shutdowns or vacation, interruption of access or building services, suspension or delay of construction (in general or certain trades), etc. These can be government mandated or recommended or privately elected or can arise out of materials shortages or labor unavailability. Delays in one building can affect another, e.g., a tenant delayed in moving into building A holding over in building B.
While leases almost always include a force majeure clause, most often those clauses are written so that they only benefit the landlord. However, sometimes they are written to give the landlord less benefit than one might initially think. For example, a force majeure clause might excuse a landlord default (and thus avoid the general remedies for default which the law would otherwise give the tenant), but might neither delay the onset of a specific tenant remedy expressly provided for in the lease, nor shift related costs from the landlord to the tenant.
In each COVID-19 related situation, a review of the individual facts, a careful reading of the lease and, often, knowledge of the applicable law (both leasing law and COVID-19 related law) is required. This paper is not a substitute for that, nor for consultation with counsel. Its purpose is to provide a framework and describe how some commonly arising issues are commonly addressed in modern commercial office leases.
The full report is divided into three major sections:
1. Tenants not yet in occupancy;
2. Tenants in occupancy; and
3. Tenants nearing the end of their term.