The lease was entered into on April 1, 2020 (unless the lease was entered into by an option to renew or renew or by another extension or renewal of an existing lease under the same conditions as the existing lease). Many commercial leases require tenants to purchase interruption of service insurance as a prerequisite for renting real estate. Such insurance is particularly important for both landlords and their lenders, as it can replace the tenant`s income and cover the tenant`s operating costs resulting from the cessation of activity in the rented premises for a reason covered by the policy, which could allow the tenant to continue to pay the necessary rents. The amount of interruption of service insurance varies, but generally covers the loss of income in the event of a “qualified service interruption”, such as natural disasters or measures taken by the State, which affect the insured`s income. As a late position, at least 50 percent of a rent reduction must take the form of a rent waiver and the rest a rent deferral. Any deferred rent must be repaid on the balance of the term of the lease or for a period of at least 24 months, whichever is greater. Even if COVID-19 is considered a force majeure event under the current rental contract, the performance of a tenant cannot be excused, unless the service is objectively impossible or economically inappropriate. Courts have often held that a provision relating to force majeure “must be accompanied by evidence that the non-compliance was directly caused by a quota and that, despite the skill, diligence and faith of the promising, the performance remains impossible or excessively costly”. 2 Some tenants wish to request a rent reduction during this period. This depends entirely on the sole discretion of the owner. As noted above, many leases exclude financial obligations from excusable obligations during the period of force majeure.
The tenant should not stop paying rent or unilaterally decide to reduce the amount of rent he has to pay. Although such an exclusion is not expressly provided for in rental agreements, it is generally accepted that the tenant is not entitled to a reduction in rent. A unilateral decision by the tenant to pay less rent would result in a lease termination. There is currently a 90-day moratorium (until 19 June 2020, unless extended) for all commercial evictions. However, this does not remove your obligation to pay rent and does not prohibit your landlord from evicting you from your commercial space at the end of the moratorium on evictions if you are late in rent and/or additional rent. Due to the COVID-19 pandemic, Jersey courts are prioritizing criminal and child cases, and are unlikely to address property-related issues, including rent arrears and procedures for terminating rental agreements, as well as property and eviction orders (rental litigation) . . .