[WSBARP] Retail Tenants and Commercial Frustration

[Andrew Hay]

That will probably be the case quite frequently -- that where there is a force majeure clause, it protects the landlord.  Depends on the bargaining power of tenant.

Query whether the one-way force majeure clause means the tenant cannot prosecute a commercial impracticability claim?


Andrew Hay
Hay & Swann PLLC
201 S. 34th St.
Tacoma, WA 98418
www.washingtonlaw.net<http://www.washingtonlaw.net/>
andrewhay at washingtonlaw.net<mailto:andrewhay at washingtonlaw.net>
253.272.2400 (w)
253.377.3085 (c)
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Douglas Scott
Sent: Thursday, April 23, 2020 2:18 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Retail Tenants and Commercial Frustration

My restaurant client has a force majeure clause in their lease with the landlord.  However, it is not reciprocal and only benefits the landlord.

DOUGLAS W. SCOTT
Rainier Legal Advocates|LLC

465 Rainier Blvd. N., Suite C
Issaquah, Washington 98027
425.392.8550 (tel)
425.392.2829 (fax)



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On Thu, Apr 23, 2020 at 1:03 PM <nestor at pplsweb.com<mailto:nestor at pplsweb.com>> wrote:
Good article.

Food for thought. Moving forward we will now have leases drafted with more specificity regarding government lock-downs or “Stay At Home Orders”. One thing I look at from the Landlord’s perspective is the Tenant is still an occupant of the landlord’s property with merchandise, equipment or furniture etc.  Even though the activities that generate the revenue has been frustrated, there is still that aspect that the Tenant continues to occupy the property.

This will probably managed with built-in forbearance clauses for either reduced rent during the shutdown, spreading out the payments over a specified term and or extending the lease.

I am interested to hear what anyone has to say.

Thanks.


Nestor Gorfinkel, Attorney at Law
Licensed in Washington & Florida
Florida Civil-Law (International) Notary

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Michael Brandt
Sent: Thursday, April 23, 2020 12:02 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] Retail Tenants and Commercial Frustration

Andrew:

Here is an article on the subject that I just posted to my website:  https://brandtlawgroup.com/leases-and-contracts-in-the-age-of-a-pandemic-an-actual-event-that-may-qualify-as-a-reason-for-rent-abatement-or-termination-of-a-lease-or-contract/

Michael D. Brandt
BRANDT LAW GROUP
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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Andrew Hay
Sent: Wednesday, April 22, 2020 7:03 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: [WSBARP] Retail Tenants and Commercial Frustration

This is probably coming up for many folks, especially with retail clients.

My initial legal framework for this is

              Is there a force majeure clause in the lease?

              Does the pandemic and/or its restrictions qualify for commercial frustration or impracticability of performance?

Does force majeure or commercial frustration/impracticability defense help the individual guarantors?

For handling this problem

              Informal discussion with LL – first step
              Formal mediation second – 2nd
              Litigation or arbitration - 3rd

Does this seem sound?  How strong is a commercial frustration or impracticability argument for this pandemic?


Andrew Hay
Hay & Swann PLLC
201 S. 34th St.
Tacoma, WA 98418
www.washingtonlaw.net<http://www.washingtonlaw.net/>
andrewhay at washingtonlaw.net<mailto:andrewhay at washingtonlaw.net>
253.272.2400 (w)
253.377.3085 (c)
THIS IS A CONFIDENTIAL COMMUNICATION AND IS INTENDED FOR THE DESIGNATED RECIPIENT ONLY.  IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY THE SENDER IMMEDIATELY AND DESTROY ALL COPIES



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