Many of us are reading this morning that the Cheesecake Factory is starting a revolution by refusing to pay rent. The article can be found here. Should you follow suit?
This is truly an unprecedented time with no precedents and caselaws for anyone to draw on, but allow me to point out a few things to consider.
One, Landlords typically grant a much more favorable lease to anchor and large national tenants such as Cheesecake Factory than a small privately owned dental office. Not to mention large corporate tenants also have bigger political and PR clout.
Two, how landlords might act in each case will be very different. The California governor has instituted a moratorium on evictions, including commercial tenants. And I highly doubt that there will be a judge sympathetic to a commercial landlord at a time like this. Nevertheless, if you take a quick look at the default provisions of your lease, there are many remedies available to a landlord aside from eviction. It can put your practice in serious jeopardy if any of these other remedies are exercised by your landlord.
As I had mentioned in my previous post, stop paying rent should not be done lightly. What other important rights might you lose under your lease if you stop paying rent and trigger the default remedies?
Every case is so uniquely different. What Cheesecake Factory, even your fellow dental colleagues might be doing can have a drastically different outcome for you because your lease and your landlord are drastically different.
Have you reached out to your insurance company to see what coverages you might have? Have you reached out to your attorney to have your lease reviewed and draft a letter to your landlord requesting relief? Have you reached out to your lender to find out about unsecured lines of credit and loan deferment? The time to take action is now.
As always, my office is available to answer any questions you might have and assist you through this challenging time.