01 Jun Relief for Commercial Landlords or Tenants in the Federal CARES Act?
Written by: Matthew Haan, Esq.
In response to the hardship being felt by millions of Americans caused by the COVID-19 pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Act contains a number of provisions designed to help individuals and businesses get through the severe economic downturn caused by the pandemic. Included in the relief package is a 120-day moratorium on eviction filings. So, what does this mean in the context of the commercial landlord-tenant relationship?
The federal moratorium prohibits landlord from filing eviction proceedings and charging fees related to the nonpayment of rent. However, it only applies to “covered dwellings.” Under the Act, a covered dwelling is one that is occupied by a tenant under a residential lease or a tenant without a lease. Further, the covered dwelling must be “on or in a covered property.” The Act defines a covered property as one that either participates in certain federal housing programs or that has a federally backed mortgage loan or federally backed multifamily mortgage loan. In other words, the federal 120-day moratorium in the CARES Act only applies to residential landlords.
This is not to say that the commercial landlord-tenant relationship remains unaffected on the state level. In Ohio, for example, Governor Mike DeWine issued an executive order that requests—but does not require—suspension of all rent payments owed to landlords by small business commercial tenants experiencing financial hardship as a result of the COVID-19 pandemic. It also requests a 90-day moratorium on evictions of small business commercial tenants. As states continue to issue, amend, and extend orders providing relief and guidelines in the wake of the COVID-19 pandemic, commercial landlords and tenants should be mindful of how these orders may affect the commercial landlord-tenant relationship