The COVID-19 pandemic has affected almost all business sectors in South Florida. Commercial rental property is no exception. The shutdown of non-essential businesses in Miami-Dade and Broward Counties has left many commercial tenants severely restricted or completely unable to generate revenue. The current circumstances have also placed great financial pressures on commercial landlords, as well. For tenants and landlords facing major issues, there may be alternatives to eviction. These may include things like workouts or lease restructuring, among other possibilities. To discuss your options and what makes the most business sense for you, be sure you are working with an experienced South Florida commercial real estate attorney.
As therealdeal.com reported, several South Florida commercial landlords are working with their tenants to keep those tenants out of the eviction process and in the spaces they currently occupy. Two South Florida-based landlords offered their tenants options including rent deferments, rent forbearances and partial rent payments, according to the report.
Landlords have several options if they have tenants impacted by COVID-19-related restrictions that are having difficulties paying rent. A landlord may declare a tenant in default and immediately begin pursuing legal action against the tenant and any guarantors, the landlord can declare a tenant in default but hold off on taking any enforcement action or the landlord can negotiate an amendment to the tenant’s lease.
Landlords should proceed with care before amending leases they have with their tenants, taking time to contemplate carefully the impacts of such a choice. As with any commercial contract or amendment to a commercial contract, it is essential to make sure that you go through the right negotiation and execution processes. While negotiations regarding the terms of the amendment may (and probably will, at least in part,) take place over email or other digital medium, you should not agree to terms over email. Any agreement to terms should be done in writing, and signed by all the necessary parties, including both parties and any guarantors of the lease.
The importance of ensuring your amendment has the right confidentiality provisions
As a landlord, you probably have numerous tenants with whom you hold leases. A decision regarding whether or not to negotiate a lease amendment (and, if so, what exactly those terms should be) is probably something that you will want to make on a case-by-case basis. Each decision you make may be a unique one based on your specific assessment of that individual tenant’s financial situation, area of business, potential for future business success and the tenant’s rent payment history.
Because each decision you make may rely on many factors and may vary from tenant to tenant, confidentiality is something that will be exceptionally important to you. It is vital to ensure that any amendment you sign with a tenant contains the proper clauses covering the tenant’s restriction against disclosures and your rights in the event of the tenant’s violation of its obligation of confidentiality.
These, of course, are unprecedented times. They are times that have placed a great deal of financial strain on commercial landlords and commercial tenants across South Florida. Creative landlords and tenants may be able to forge a mutually beneficial path forward. Whether you’re a landlord contemplating evicting a tenant, a tenant facing eviction, a landlord considering amending a lease or a tenant approached about a possible lease amendment, you need the right legal team working for you. Put the skilled South Florida commercial real estate attorneys at Stok Kon + Braverman on your side. Our attorneys have many years of experience successfully handling commercial lease cases on behalf of both tenants and landlords.
Contact us online or by calling (954) 237-1777 to schedule your consultation.