Many restaurant, retail, and commercial tenants are facing challenges in making rent in light of COVID-19 and mandatory government requirements. We've been advising clients to check their business interruption insurance for coverage, review their leases for rent abatement related to access, services, and other force majeure, and to stay in contact with their landlords to discuss the present economic realities.
Fortunately, for some in California, the Cities of Los Angeles and San Francisco recently stepped in to help commercial tenants.
Los Angeles Commercial TenantsOn Tuesday, March 17, 2020, Los Angeles Mayor Eric Garcetti ordered a moratorium on commercial evictions of tenants unable to pay rent due to circumstances related to the COVID-19 pandemic. Mayor Garcetti’s order will be in place until March 31st, 2020 unless extended.
Circumstances related to the COVID-19 Pandemic applicable to commercial tenants include loss of business income due to a COVID-19 related workplace closure and any reasonable expenditures related to the government-ordered emergency measures. A provision in the order gives eligible tenants a maximum of three months following the end of the emergency period to repay any back due rent. View the release here.
Additional County of Los Angeles COVID-19 Small Business Information can be found here.
San Francisco Commercial TenantsSan Francisco’s Mayor London Breed also announced a similar moratorium of commercial evictions for small and medium-sized businesses suffering financial impacts caused by COVID-19 Pandemic. The order follows Governor Gavin Newsom’s Executive Order N-28-20, declaring a State of Emergency related to COVID-19 and the March 13th, 2020 order of a moratorium on residential evictions.
This commercial eviction moratorium will apply to businesses with a license to operate in San Francisco that have less than $25 million in annual gross receipts. The order will be in effect for 30 days and can be extended by the Mayor for another 30 days. If the Local Emergency declared by the Mayor is rescinded at any point, the moratorium will cease to be in effect.
The City of San Francisco has also launched efforts to support small businesses including deferring business taxes and licensing fees, launching a relief fund for impacted businesses, and supporting nonprofits funded by the city so workers don’t lose their incomes, while advocating for state and federal support for workers and businesses. View the release here.
Additional City Resources for Small Businesses in San Francisco can be found here.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.