Commercial leases often run for multiple years. Even if the tenant business closes or begins operating out of a different space, paying rent may still be an ongoing responsibility until the lease technically ends.
Those concerned about overextending themselves and their organizations may request certain protective provisions in a commercial lease. A force majeure clause allows for the end of contractual obligations in scenarios where forces outside of either party’s control make continuing the agreement impossible.
Can commercial landlords ignore a force majeure clause and demand continued rent payments in scenarios wherein catastrophic circumstances have interrupted business operations?
Lease disputes might require litigation to resolve
If a tenant intends to invoke a force majeure clause to end their lease early and absolve themselves of any financial penalties the landlord might otherwise impose, they have to validate that the situation warrants their request. Force majeure clauses generally only apply to highly unusual circumstances.
A business failing typically does not trigger a force majeure clause. Acts of terrorism or environmental disasters, on the other hand, could be a reason to invoke a force majeure clause.
Many times, landlords do not outright refuse to uphold a force majeure clause. Instead, they may counter a request by insisting that the circumstances do not justify the tenant’s request. When a dispute about the severity of the business interruption arises, the resulting commercial real estate dispute may end up going to court.
Disagreements about force majeure clauses may require the attention of a judge. Having support while reviewing a lease and preparing for commercial real estate litigation can make a major difference.