As a business owner, the COVID-19 pandemic has likely hurt your business. If you are facing eviction due to not paying rent, here’s what you need to know.
Experts recorded America’s first confirmed case of COVID-19 on January 21.
In the intervening time, the virus has devastated societies and economies across the country. People have lost their lives, and many businesses have had to close, at least temporarily.
If the onset of the virus has affected your business, you may be wondering whether you are in danger of being evicted.
Read on as we look at the risk of eviction faced by businesses in different states.
What Is a Commercial Tenant?
A commercial tenant is anyone who rents premises to carry on a business. If you rent a property and use it as a store or an office, you are a commercial tenant.
Commercial tenants are presumed to have a greater understanding and knowledge of the law than residential tenants. Because of this, the courts afford commercial tenants far less protection than residential tenants.
Courts are also reluctant to interfere with the property where to do so would remove a family from their home. This is not the case with businesses.
How Does the Eviction Process Work?
The requirements for eviction vary from state to state.
In normal circumstances, eviction becomes possible once a tenant has fallen behind by a certain amount in their rent payments.
There are other reasons for eviction as well. These include misuse of the property, damage to the property or its contents, or illegal conduct on the premises.
A summary of eviction rules in some different states is given below.
In California, landlords must initiate eviction with a “3-day” notice. This requires tenants to pay amounts owing within this timeframe or face eviction proceedings.
The landlord must give the tenant a full three days to remedy the issue before further action is taken.
Once the landlord’s right to an eviction is confirmed, the tenant has five days to move out. If they fail to do so, the landlord must take the matter to court. Landlords do not have any right to personally evict tenants in California.
The applicable notice period in Illinois is five days. Once the landlord serves notice, this is the length of time the tenant has to rectify the situation.
Once this time has elapsed, landlords are entitled to serve tenants with an eviction order. The matter must be heard by a court unless the tenant fails to show up. If this happens, eviction is automatically approved by the judge.
A three-day notice period applies in Florida. However, this is only the case where failure to make payment is at issue. For other matters, fifteen days’ notice is required.
After this, a tenant will be served with an unlawful detainer complaint. If a tenant does not challenge this within five days, the eviction will be final. If they do mount a challenge, a court will hear the matter within a few weeks.
This blog post from McKenna, McCausland & Murphy will give you more details about the rules on commercial evictions in Florida.
The rules on eviction in Texas are more favorable to the landlord than those in other states.
In Texas, landlords are entitled to lock out tenants where they owe rent. They can do this without giving notice.
However, landlords must furnish tenants with details of how they can regain access. This will usually relate to the payment of rent.
Will the Rules Change Due to COVID-19?
While the legislative provisions around commercial eviction remain the same, government bodies have stated that measures will be taken to protect vulnerable commercial tenants.
The Department of Housing and Urban Development has announced that all evictions and foreclosures are to be halted until the end of April.
Congress has also passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This comes to the assistance of businesses specifically.
The Act provides for significant financial assistance for small and medium businesses.
Approaches by state bodies have varied widely. Many states have yet to propose eviction moratoria for businesses affected by COVID-19.
Even in the absence of a formal moratorium, however, states have taken certain measures. In Alaska, for example, authorities have issued an executive order which serves to delay evictions for a period of 120 days (starting from March 24).
Most states have passed some orders of this nature at this point.
Should You Be Worried About Eviction?
As noted above, some protections have been put in place to address concerns about commercial eviction at this time.
However, if your business is in dire financial straits and you are unlikely to be in a position to continue paying full rent, you may have cause to be concerned.
The first step to take is to talk to your landlord.
Explain the situation to them frankly. See if they would consent to delayed rents or restructured payment plans.
Remember, if they evict you, they may struggle to find another tenant, given the current situation. Therefore, it’s in their best interest to negotiate with you.
However, if your landlord refuses to cooperate and threatens eviction, it may be time to hire a lawyer.
Depending on the terms of your lease and the state you’re in, a court might find that your landlord has no right to evict you. Additionally, a lawyer will be able to instruct you as to measures you can take to buy time.
This might end up making the difference between eviction and retention of your lease.
The best defense you have against eviction is knowledge. There are ways in which you can protect yourself; you just have to know how to use them.
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