The California Commercial Real Estate Game of Chicken . . . Continues.

The California Commercial Real Estate Game of Chicken . . . Continues.

On Behalf of | Sep 29, 2020 | Firm News |

Way back in March, and continuing through July, when this pandemic was still in the “first half” (at best), each of the professional sports leagues began playing perilous Games of Chicken, instead of baseball, basketball, or football games.  Millionaire players and billionaire owners struggled with uncertain legal authority and ambiguous contracts to guide them.  The same can be said about commercial landlords and tenants throughout California and, certainly, here in Los Angeles and Ventura Counties.

But unlike these sports leagues whose players and owners figured out how to co-exist, commercial landlords and tenants continue to play” “Chicken,” with each side refusing to budge on their positions regarding their commercial leases and speeding towards each other on a collision course.

In fact, some potentially fatal collisions have already occurred.  For example, under the operative City of Los Angeles Ordinance No. 186606, no commercial landlord may endeavor to evict any commercial tenant.  “Endeavor to evict” is defined as conduct where the Owner lacks a good faith basis to believe that the tenant does not enjoy the benefits of this article and the Owner serves or provides in any way to the tenant: a notice to pay or quit, a notice to perform covenant or quit, a notice of termination, or any other eviction notice.  Some tenants who have substantially complied with the requirements of local ordinances like this one prohibiting evictions, including by sharing otherwise confidential financial statements and by paying as much rent as they can afford to pay, are now receiving Notices of Default and facing Breach of Lease lawsuits seeking monetary damages—and some tenants even have seen their landlords list their spaces for rent.

On the other hand, some landlords who have generously and patiently negotiated in good faith with their tenants still have not received significant rent from tenants who can easily afford to pay, now face dire consequences with their commercial lenders.

Throughout this pandemic, Finch Tetzlaff, LLP has assisted landlords and tenants to navigate these treacherous roads.   We have successfully negotiated lease amendments and terminations for clients on both sides of the road that address not only rent deferral consistent with local ordinances, but also rent abatement.   We have assisted landlords and tenants with game plans to avoid the potholes that exist way down the road, as we approach the fourth quarter of 2020 and, hopefully, of this pandemic.   Before commercial eviction moratoriums expire, you call on us with confidence to expertly represent you to end to this Game of Chicken by helping you safely meet somewhere in the middle of the road.