When Your Business Model Adapts to the Changing Times, but Your Landlord Doesn’t
Customers and business owners are eager to participate in the economy in whatever ways they can. Washingtonians enthusiastically buy food from the curbside versions of their favorite restaurants during their breaks from working at home. Adapting to the economic climate of the COVID-19 pandemic is essential to the survival of small businesses, and entrepreneurs in the District of Columbia are doing an admirable job. One major challenge that some businesses continue to face, though, is conflicts with landlords. A Washington DC small business lawyer can help DC business owners resolve conflicts related to commercial leases and other business agreements.
The Costs of Renting a Commercial Property During the COVID-19 Pandemic
Washington DC is one of the most expensive places in the United States in terms of real estate prices, and that affects the cost of rent in both residential and commercial properties. Commercial real estate is one of the biggest economic casualties of the COVID-19 pandemic, as commercial tenants struggle to pay their rent, and their landlords struggle to make payments on their mortgages. This is a major problem for small retail businesses that can no longer afford to pay the rent on their retail spaces, which have been forced to stay closed for months. Unlike most other kinds of business agreements, most leases do not contain a force majeure clause (also called an “acts of God” clause), which allows either party to get out of their contractual obligations in the event of a disaster, such as a pandemic.
The Case of Kramerbooks
Kramerbooks, with its adjoining restaurant Afterwords has been a popular hangout in Dupont Circle since the 1970s, and, like every other restaurant and retail bookstore in the District of Columbia, its operations have been greatly scaled back since March. Online sales of books have been robust, and the barbecue restaurant Federalist Pig has been operating a takeout-only pop-up restaurant during the COVID-19 shutdown. Steven Salis, who bought Kramerbooks and Afterwords several years ago, has been involved in a dispute with the restaurant’s landlord since before the COVID-19 pandemic began. Salis wants to renovate the building so that the restaurant will no longer have a mezzanine level, but the landlord objects on the grounds that the change will lower the building’s resale value. In May 2020, Salis announced plans to move Kramerbooks from its Dupont Circle location. Meanwhile, his lease on the building lasts until 2026. It is likely that Salis will have to pay a hefty fee to terminate the lease early, or else face a costly legal battle.
Let Us Help You Today
Even the most successful businesses are struggling to pay rent in these challenging economic times. A small business lawyer will help you find a reasonable solution to a dispute with your landlord during the COVID-19 crisis. Contact the Washington DC small business law attorneys at Tobin, O’Connor & Ewing for help today.