Legal Lens: How residential and commercial leases are impacted differently during COVID

Legal Lens

ST. LOUIS– There appears to be a massive shift to working from home because of COVID. So what happens to commercial buildings?

Brandon Jackon, an associate attorney with Brown & Crouppen explains what happens when tenants want out of their lease because of the pandemic.

“Depends on why a client wants out of a lease. There’s are differences between a business going out of business due to COVID-19 and there are other businesses that are restructuring and sending people to work from home,” said Jackson.

He explains ultimately the terms of the lease will control the issue. Also, Jackson says there is a difference between how courts treat residential and commercial leases.

“When a residential tenant enters into a lease agreement with a landlord, courts assume landlords have more bargaining power or access to resources than residential tenants. In the case of a business in a commercial lease, courts assume they have the same access to resources and are less likely to step in and apply terms that are not in the contract,” said Jackson.

There is another difference between residential and commercial tenants during COVID. 

Jackson says businesses aren’t receiving the same protections because the CDC says there should be moratoriums on residential evictions because homelessness is a public health risk. In terms of the spread of COVID-19. Unlike in residential leases, a company going out of business or sending employees homes doesn’t increase homelesseness.

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