Get Remedies for Temporary Halt in Business Operation

February 12, 2016
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It’s important that you don’t bear the risk of an interruption in your business due to public construction projects that are out of your control. Leases sometimes provide some relief for a tenant in an “eminent domain” situation—that is, a government entity takes private property for public use. And sometimes leases will provide relief for tenants faced with a construction project that becomes permanent. But if you don’t ask for remedies in the case where a temporary construction project hampers or halts your business, you’ll find yourself paying rent while your profits go down—or stop altogether.

Make sure that the risk is allocated to the owner, or, if you can’t allocate it completely to the owner, try to work out a fair arrangement. Ask the owner to specify the particular circumstances in a temporary construction project scenario under which you’ll be given a break on rent or other special considerations to help with a setback. It’s important to define “temporary”; you don’t want to have to wait for a court to determine the meaning if the owner disagrees with the length of time you consider to be temporary.

For a case on point that demonstrates the importance of remedies that cover an eminent domain event, see “Allocate Risk of Business Interruption to Owner,” available to subscribers here