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Tenant Invokes Force Majeure Clause Following Stay-At-Home Order; Court Agrees to Partial Applicability: Rent Obligation Reduced in Proportion to Tenant’s Ability to Operate

This Bulletin is brought to you by the Real Estate Affinity Group of AHLA's Hospitals and Health Systems Practice Group.
  • October 16, 2020
  • Jennifer R. Shoup , Hall Render Killian Heath & Lyman PC

Due to the effects of “stay-at-home” orders issued during the ongoing COVID-19 pandemic that preclude, in full or in part, the operation of certain types of businesses, tenants under commercial leases nationwide have invoked “force majeure” clauses to excuse non-performance. A recent ruling by the U.S. Bankruptcy Court of the Northern District of Illinois (Eastern Division) is one of the first that deals directly with the issue of whether such invocation is warranted.

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