COVID-19 and the governmental regulations enacted to combat the spread of the virus have had substantial impact on the real estate community. The State of Wisconsin has prohibited eviction proceedings, foreclosures, and sheriff’s sales, and many courts are currently closed for all but emergency action. Apartment leasing agents are unable to enter into apartments. There is an ongoing push to postpone the payment of property taxes, and many other issues arising out of the state and federal legislation arising from the pandemic are having drastic effects on the real estate industry. However, the most common questions that our real estate clients have been asking us concern the effect of COVID-19 related issues on lease obligations.
The rights and responsibilities of landlords and tenants are governed by the specific provisions of the lease agreement and any inquiry relating to the rights of either landlord or tenant must begin with a review of the lease agreement. Specific provisions of commercial leases that should be reviewed include: force majeure, insurance, quiet enjoyment, termination, operating covenants and co-tenancy provisions. Below are a few of the issues which we have been analyzing for our landlord, tenant and lender clients in light of COVID-19.