operational advisory
1. Commercial Tenant/Landlord Relationship by John Coyne, ESQ
Landlords will have to confront the reality on the first of the month that some commercial/restaurant tenants will not be able to pay rent in a timely manner. The respective rights and obligations of such landlords and tenants are those agreed upon in the lease(s) and others applicable to all commercial tenancies under Massachusetts law.
Failure to pay rent when due is a breach under a lease. Generally, a lease provides the tenant with a right to “cure” the breach following a written notice of the default from landlord by paying the late rent within the time to cure specified in the Lease.
In these difficult times, it may be in the best interest of both landlord and tenant to reach an agreement to defer or forgive the payment of all or some rent until the health and economic crisis abates. A tenant should initiate contact with a landlord and engage in good faith discussions or attempt to reach at least a short-term resolution rather than not paying rent without any explanation. Having no contact or failing to reach some resolution will leave the landlord with no options except to initiate eviction proceedings. The goal of both landlord and tenant should be to reach an agreement, even if short term, that will leave both in a better position than an eviction proceeding.
A landlord does not have a right to engage in “self-help” even if the tenant fails to cure a breach of a lease, meaning the landlord cannot unilaterally take steps to physically remove the tenant or tenant’s property from the premises or otherwise interfere with tenant’s access. The landlord’s remedy is to initiate an eviction proceeding in which the landlord seeks a judgment from the Court for possession of the premises, unpaid rent and monetary damages caused by the breach. An eviction proceeding can take months.
A landlord who engages in unlawful self-help can be liable to a tenant for losses and damages caused by such unlawful action.
A tenant may possibly be temporarily relieved from the obligation to pay rent if performance is impossible due to Government’s Closure Order and a lease permits temporary non-performance under such circumstances.
An agreement that provides that tenant will vacate the premises and give possession to landlord should also specifically address the tenant’s liability for unpaid rent; damages, including loss of income, incurred by landlord following termination of the lease; and the liability of any personal guarantors of the lease payments.
If you have specific lease questions, you should consult with your attorney.
Landlords will have to confront the reality on the first of the month that some commercial/restaurant tenants will not be able to pay rent in a timely manner. The respective rights and obligations of such landlords and tenants are those agreed upon in the lease(s) and others applicable to all commercial tenancies under Massachusetts law.
Failure to pay rent when due is a breach under a lease. Generally, a lease provides the tenant with a right to “cure” the breach following a written notice of the default from landlord by paying the late rent within the time to cure specified in the Lease.
In these difficult times, it may be in the best interest of both landlord and tenant to reach an agreement to defer or forgive the payment of all or some rent until the health and economic crisis abates. A tenant should initiate contact with a landlord and engage in good faith discussions or attempt to reach at least a short-term resolution rather than not paying rent without any explanation. Having no contact or failing to reach some resolution will leave the landlord with no options except to initiate eviction proceedings. The goal of both landlord and tenant should be to reach an agreement, even if short term, that will leave both in a better position than an eviction proceeding.
A landlord does not have a right to engage in “self-help” even if the tenant fails to cure a breach of a lease, meaning the landlord cannot unilaterally take steps to physically remove the tenant or tenant’s property from the premises or otherwise interfere with tenant’s access. The landlord’s remedy is to initiate an eviction proceeding in which the landlord seeks a judgment from the Court for possession of the premises, unpaid rent and monetary damages caused by the breach. An eviction proceeding can take months.
A landlord who engages in unlawful self-help can be liable to a tenant for losses and damages caused by such unlawful action.
A tenant may possibly be temporarily relieved from the obligation to pay rent if performance is impossible due to Government’s Closure Order and a lease permits temporary non-performance under such circumstances.
An agreement that provides that tenant will vacate the premises and give possession to landlord should also specifically address the tenant’s liability for unpaid rent; damages, including loss of income, incurred by landlord following termination of the lease; and the liability of any personal guarantors of the lease payments.
If you have specific lease questions, you should consult with your attorney.
2. Covid 2 Summary - Families First Coronavirus Response Act
The U.S. Department of Labor through its Wage and Hour Division is responsible for implementing and enforcing the new leave mandates. The Department issued implementing regulations on April 1, 2020, which detail employer and employee obligations, as well as an exemption available to qualifying small employers with fewer than 50 employees. Below are key aspects of the Department’s regulations.
Click here to see the advisory.
The U.S. Department of Labor through its Wage and Hour Division is responsible for implementing and enforcing the new leave mandates. The Department issued implementing regulations on April 1, 2020, which detail employer and employee obligations, as well as an exemption available to qualifying small employers with fewer than 50 employees. Below are key aspects of the Department’s regulations.
Click here to see the advisory.
3. ABCC Issues Advisory Regarding the 60-Day Credit Rule
This advisory goes back to any invoices issued after January 18. This order is open ended and can be extended at the discretion of the Commission.
Click here to see advisory.
ALCOHOLIC BEVERAGES CONTROL COMMISSION ORDER REGARDING DELINQUENCY REPORTING PERIOD (CREDIT TERMS)
In light of the unprecedented COVID-19 pandemic, the Alcoholic Beverages Control Commission ("Commission") recognizes the hardship posed to § 12 licensees to comply with the sixty-day credit terms on invoices as outlined in M.G.L. c. 138. § 25.
Therefore, the Commission orders that the credit terms for all invoices issued on or after January 18. 2020. to § 12 licensees are extended by thirty (30) days to a total of ninety (90) days for payment of those invoices. This extension does not apply to any other license type or to § 12 licensees already listed on the credit delinquency list as of the date of this order.
All of the following must be met to qualify for this extension of credit terms from sixty (60) to ninety (90) days:
Licensees who meet the above criteria do not need to apply to the Commission for this extension of credit terms as these terms apply automatically. Licensees who do not meet the criteria are reminded that they may still apply to the Commission for relief pursuant to M.G.L. c. 138, § 25, in the ordinary course.
This order shall remain in effect until rescinded by the Commission.
This advisory goes back to any invoices issued after January 18. This order is open ended and can be extended at the discretion of the Commission.
Click here to see advisory.
ALCOHOLIC BEVERAGES CONTROL COMMISSION ORDER REGARDING DELINQUENCY REPORTING PERIOD (CREDIT TERMS)
In light of the unprecedented COVID-19 pandemic, the Alcoholic Beverages Control Commission ("Commission") recognizes the hardship posed to § 12 licensees to comply with the sixty-day credit terms on invoices as outlined in M.G.L. c. 138. § 25.
Therefore, the Commission orders that the credit terms for all invoices issued on or after January 18. 2020. to § 12 licensees are extended by thirty (30) days to a total of ninety (90) days for payment of those invoices. This extension does not apply to any other license type or to § 12 licensees already listed on the credit delinquency list as of the date of this order.
All of the following must be met to qualify for this extension of credit terms from sixty (60) to ninety (90) days:
- the licensee must be a § 12 licensee;
- the § 12 licensee must not be listed on the credit delinquency list as of the date of issuance of this order; and
- the invoices that are subject to the extension must be issued on or after January I 8. 2020.
Licensees who meet the above criteria do not need to apply to the Commission for this extension of credit terms as these terms apply automatically. Licensees who do not meet the criteria are reminded that they may still apply to the Commission for relief pursuant to M.G.L. c. 138, § 25, in the ordinary course.
This order shall remain in effect until rescinded by the Commission.
