| NYC Business Group
Questions Landlords Should Ask Their Attorney And Insurance Agent
The corona virus pandemic has significantly affected the ability of business across the United States to continue to operate in the ordinary course. As a landlord, if you have any questions regarding the road-map as to how to deal with this changing time, you should consult your attorney and local insurance agent.
Like many others, you might be sitting in social isolation, wondering what to do next. The COVID 19 outbreak has wreaked havoc on us, forcing us to a neo-normal future. Even a few months, the conventional real estate norms were supposed to be the bedrock of the trade. Ironically, they don’t matter much anymore. The post-pandemic world will surely dictate a new view of what value those terms hold going forward.
Indeed, there are not a lot of questions popping up, and most of them will be answered only in the coming days. Take, for instance, the area of leasehold interests. Many are clueless about how to deal with the post-pandemic situation. If you are a landlord who just inked a lease, you are likely to be in trouble. Just imagine you are done with your tenant improvements and your tenant calls and are unsure about going forward with their lease? It’s likely to happen in the coming future. If you are off the mark with this, you will lose a significant amount of time and money. So what now? This is just one of the issues that will plague the minds of many landlords like you.
Ask Your Legal Counsel and Insurance Broker New York
As you deal with this crisis and prepare for the effects, consider the following areas and address these questions with your legal counsel and insurance broker New York:
Business Interruption Insurance:
They say, “It’s always better to be safe and sorry.” If you don’t learn now, then when! Dealing with such a massive economic downturn may not be easy for many, but this pandemic has taught us to be far-sighted. Feel free to ask your insurance agent if the pandemic will be considered as an insurable loss within the policy guidelines. If no, then what? Catastrophe, pandemic insurance, and business interruption all require a critical review of your policy documents. Talk to your attorney regarding this and call your insurance agent with questions. Do a little bit of research and legwork. Take notes.
Force Majeure:
This could be considered a fancy term for the “Act of God.” Is the pandemic a force majeure? Well, it could be. Who knows? After all, most of us never experienced something like this before it happened. So, discuss this with your attorney or agent. This will be interesting as there are riders galore and verbiage to the contrary. So steer-clear of your confusion with your professionals.
Lease Abandonment and Other Leases Issues:
It could be frustrating for any landlord to hear something, “I am afraid I can’t come back.” Can you enter and secure your property once rental eviction bans end? Can the property owner dispose of the tenant’s property? What if the tenant returns? To avoid any penalty and other troubles arising from your action, call your attorney and insurance agent.
Mortgage:
It could be that you have taken a loan and are now unable to pay your mortgage. What if you did not receive forbearance from your lender? What if you failed to pay regardless of the case? Will this affect your tenants? How will you deal with this situation? Seek guidance from legal counsel.
Utilities:
What if the tenant stops paying rent when you continue to pay the utilities? Is it possible to shift the burden to the tenant? Can you take any measures against them for non-payment? What about the city rules about it? Contact the contracted public utility for guidance.
Co-Ops, HOAs and Common Area Fees
What happens when you realize that the parking lot needs some work, and there are a few bulbs out in the lot and walkways? Be sure what capacity to operate, you or the property owner has. If tenants pay, they expect value. Make sure you are delivering what your tenants expect. Check your lease document for issues related to occupancy levels, common area fees, and maintenance. Be communicative and open — no one saw this coming, you nor your tenants.
Is your parking lot in need of some work? Are there a few bulbs out in the lot and walkways? Is it your responsibility or tenant’s to repair utilities? No wonder it’s your responsibility to deliver so long as they pay. But in what capacity are you entitled to operate? See-through your lease document for issues as they are associated with the levels of occupancy, standard area fees, and maintenance. Be frank and cooperative – no one saw this coming, neither you nor your tenant.
Should I Buy or Sell at this time?
This could be a tricky question. Well, it is always dependent on the situation of the client. Trade-offs are not a single operation. It’s not possible without most people and companies. Why do you want to sell it in the first place just now? Is it so because you need money to maintain your lifestyle? Is it a panic reaction or outside agitation? Discuss your mind with your attorney and local insurance agents. They are the ones to give you the right tips and instructions. So don’t worry.