COVID-19 Lessons Learned for Restaurant Tenants

Stay-at-home orders and closures of non-essential businesses as a result of the COVID-19 pandemic have had significant economic implications for restaurant tenants. Going forward, while negotiating new leases, restaurant tenants should consider adding specific provisions that may potentially lessen the effect of governmental closure orders, pandemics and similar events on their operations. 

Premises Delivery Date. In the event the leased premises are under construction and will not be delivered by the landlord to the tenant upon signing of the lease, the lease should include a deadline by which the landlord must deliver the premises to the tenant and a related tenant’s termination right. Tenants may want to clarify in the lease that such deadlines cannot be extended by a force majeure event, such as a pandemic, since the tenant may not want to sit and wait indefinitely until space can be delivered by the landlord.

Co-Tenancy. When negotiating leases in shopping centers, tenants…