The Latest Coronavirus Litigation: Part 2
COVID-19 continues to remain an interesting backdrop for recent and ongoing litigation. With millions affected economically by government shutdowns, there continue to be plenty of disputes within the real estate industry and elsewhere.
Jenner & Block
Perhaps the most notable ongoing real estate case involves Jenner & Block and their landlord. Jenner & Block is a law firm located on Clark Street in downtown Chicago. Their landlord, an affiliate of the real estate investment firm Heitman, filed a lawsuit against Jenner & Block in May alleging that they had defaulted on their lease and owed Heitman nearly $4 million in damages. According to the lawsuit, rent payments were missed for both April and May, along with other fees.
This was one of the first major lawsuits dealing with tenant-landlord disputes resulting from the COVID-19 pandemic. The law firm representing Heitman’s affiliate indicated that they wanted to work with Jenner & Block, but there was no rent relief made for their situation. Jenner & Block fired back in June alleging that Heitman’s affiliate actually owed them $840,000 in rent credit because of certain stipulations in their contract.
Their ongoing dispute remains on the radar for law firms, and other businesses struggling to pay rent or fill their buildings, across the country. COVID continues to present unique challenges to both tenants and landlords.
Landlord-Tenant Disputes
Other major tenants across the country are facing legal challenges to unpaid rent. The landlord of Gap’s Midtown location in Manhattan has sued the company for unpaid rent. Robert Morris University vacated their location downtown Chicago 4 years early and are also being sued.
Now, landlords are starting to feel the effects of missed payments. For example, the landlord for Robert Morris’s Chicago location has missed over two month of debt service payments. They have already started marketing the location in hopes of avoiding foreclosure. Landlords of smaller properties and residential areas are feeling the same effects.
In defending against the claim of inability to pay rent due to Covid, some landlords are claiming that restaurants could have actually stayed in business by doing take out or curbside service rather than shuting down entirely. Restaurants who have shut down are thus facing some resistance on missed payments or attempts at relief.
Tenants at various locations at WeWork - a giant co-working company - have threatened to sue if WeWork continues to collect monthly payments despite no one being able to use their offices. This includes locations in Washington D.C., New York, and Los Angeles.
The co-working arena offers an even more complicated take on real estate disputes. Many of the tenants at co-working facilities simply pay monthly as the service - i.e. access to the office location - is needed.
Residential
Few major disputes have arisen publicly concerning residential landlords and tenants. This is due in great part to government imposed eviction moratoria. However, July 31 is the final date for the additional $600 weekly unemployment compensation. As of the writing of this blog, an executive order has been signed extending unemployment but democrats and republicans cannot agree on the terms of a solution. This, along with other forms of relief, have delayed disputes. Now, as the economy seemingly reopens and relief packages are reduced or come to an end, disputes are likely to arise.
If you are wondering how COVID-19 is going to affect your real estate, let our team help you out. For legal guidance with your mortgage, get in touch with a real estate attorney at Lee Scott Perres, P.C.
