With the recent outbreak of the coronavirus (COVID-19) in the United States, Texans are left to wonder how this pandemic will affect their lives and businesses. What will landlord do? What will tenants do?
Landlords, tenants, contractors, buyers and sellers are already facing many difficult questions. What do your contract says about you can do? What are your options? Does the coronavirus excuse your performance? Must you pay for rent that you cannot afford? Can you force a tenant to pay if the tenant does not have funds today? What will happen to residential and commercial leases?
This uncertainty is bound to leave anyone feeling overwhelmed. But the expert real estate attorneys at The Weaver Law Firm are here to help you through these trying times and provide you with the answers you need.
WILL TENANT LEASE OBLIGATION BE EXCUSED?
Does your commercial lease take into consideration an event like the coronavirus? Does COVID-19 affect your contracts and your performance? Are you required to following through with the obligations described in your lease contract? A typical Force Majeure clause will state as follows: Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, acts of war, terrorism, terrorist activities, inability to obtain services, labor, or materials or reasonable substitutes therefore, governmental actions, civil commotions, fire, flood, earthquake or other casualty, and other causes beyond the reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this Lease. What does this mean for you? Even if your commercial lease is not helpful to your situation, we may be able to offer some practice advice and representation. If your contract does not carefully specify instances such as pandemic or virus, your performance may not be excused. Which real estate laws apply?
Most contracts do not automatically excuse performance. Some contracts require the parties to provide a written notice in anticipation of default or a notice to cure default. Do not assume that your performance is excused by your contract. Instead, contact a real estate lawyer who can help you determine your options. If you are entering into contracts during this uncertain time, Richard Weaver at The Weaver Law Firm can help you ensure that the agreement is carefully drafted to account for all contingencies. Richard Weaver is a double board-certified attorney, certified in both residential and commercial real estate law.
WHAT ABOUT COMMERCIAL LEASES DURING COVID-19?
Commercial landlords and tenants are being similarly affected. Tenants with businesses that have been forced to close their doors may not be able to meet their lease obligations, which in turn will have a potentially devastating impact on landlords. The Texas Supreme Court has not placed a moratorium on commercial evictions. However, these cases will be greatly affected by these Emergency Orders. The First Emergency Order permits all courts in Texas to extend all deadlines and procedures for a period “ending no later than 30 days after the Governor’s state of disaster has been lifted.”
HOW WILL THE CORONAVIRUS OUTBREAK AFFECT RESIDENTIAL LEASES?
Residential landlords and tenants are two of the largest groups that will be impacted by the coronavirus outbreak. Many residential tenants have lost their jobs. Landlords and tenants are wondering when evictions will take place.
The Texas Supreme Court has issued several Emergency Orders. The Fourth Emergency Order Regarding the COVID-19 State of Disaster (the “Order”)issued by the Texas Supreme Court on March 19, 2020, states that for residential property, “No trial, hearing, or other proceeding may be conducted, and all deadlines are tolled until April 10, 2020.” That date will subject to extension by further order of the Texas Supreme Court.
What does the Order mean? Almost all pending residential evictions in the courts must be placed on hold. The Order further provides that cases may be filed. Still, tenants may not be served with notice of the lawsuit until after the time allowed by the order.
What is an eviction has already been granted by the court? The Order provides that “a writ of possession may issue, but the posting of the written warning required by § 24.0061(d)(1) of the Property Code and the execution of the writ of possession may not occur until after April 26, 2020. . .” The landlord will be unable to forceable remove a tenant from the real property until after the date identified by the Supreme Court order.
There is an exception to this moratorium for residential eviction cases. This is caption is when the tenant or the tenant’s household members or guests “pose an imminent threat of (i) physical harm to the plaintiff, the plaintiff’s employees, or other tenants, or (ii) criminal activity. . .” If you are a landlord and find yourself in this situation, contact a board-certified attorney at The Weaver Law Firm at 713-572-4900.
