Distressed commercial tenants and their landlords may find themselves in tense situations during the COVID-19 pandemic. As those parties consider how to handle their lease obligations, they should consider, among other things, the varying contours of recent executive and emergency orders. As shown below, orders from various jurisdictions have taken different approaches to addressing the pandemic’s impact on commercial tenants.
Some jurisdictions have directly addressed commercial tenants in their emergency orders. For example, on April 1, 2020, the governor of Ohio requested that, for a period of at least ninety consecutive days, landlords (i) “suspend  rent payments for small business commercial tenants in the State of Ohio that are facing financial hardship due to the COVID-19 pandemic,” and (ii) “provide for a moratorium of evictions of small business commercial tenants[.]” The Ohio governor also requested that lenders “provide commercial real estate borrowers with a commercial mortgage loan for a property located in the State of Ohio an opportunity for a forbearance of a term of at least ninety (90) consecutive days” due to the pandemic. On April 3, 2020, the governor of Maryland prohibited state courts from, under certain circumstances, “giv[ing] any judgment for possession or repossession, or warrant for restitution of possession or repossession of residential, commercial, or industrial real property” during the state of emergency.
Other jurisdictions, in comparison, have omitted commercial tenants from their emergency orders relating to leases. On March 20, 2020, for example, the governor of Illinois ordered all state, county, and local law enforcement officials to “cease enforcement of orders of eviction for residential premises” for the duration of his COVID-19 disaster proclamation. In Florida, on April 2, 2020, the governor suspended and tolled, for 45 days, “any statute providing for an eviction cause of action under Florida law solely as it relates to non-payment of rent by residential tenants due to the COVID-19 emergency[.]” On March 18, 2020, the Pennsylvania Supreme Court directed that, for a certain time period, “no officer, official, or other person employed by the Pennsylvania Judiciary at any level shall effectuate an eviction, ejectment, or other displacement from a residence based upon the failure to make a rent, loan, or other similar payment.”
The District of Columbia provides yet another example of how emergency measures may relate to commercial tenants. Using broad language, the Superior Court of the District of Columbia recently ordered that “[a]ll evictions of tenants and foreclosed homeowners on or before May 1, 2020 are stayed.” By its text, the order does not expressly include or exclude commercial tenants from the stay.
This emerging landscape highlights the need for commercial tenants and their landlords to carefully review all of the COVID-19 emergency orders that might apply to them. In addition to state-level orders, cities and counties may also promulgate emergency measures that impact the landlord-tenant relationship.
Information about COVID-19 and its impact on local, state and federal levels is changing rapidly. This article may not reflect updates to news, executive orders, legislation and regulations made after its publication date. Visit our COVID-19 resource page to find the most current information.