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AP: Landlords Are Getting Squeezed Between Tenants and LendersOctober 13, 2020
O’Melveny real estate partner Michael Hamilton is quoted in this article, which reports that landlords are under strain from unpaid rent amid the coronavirus pandemic and many are expected to take legal action in response.
Landlords are still expected pay mortgages and maintain their properties, even if tenants miss payments. Smaller landlords, who own residential apartments or storefronts, have resorted to borrowing money from relatives or tapping into personal savings to make ends meet, AP reported. Large commercial landlords, like Simon Property Group, have more options at their disposal. For example, Simon Property is in talks to purchase J.C. Penney, one of its largest tenants, and has sued the Gap for US$107 million in back rent.
Hamilton told the publication he anticipates that retail and other commercial landlords will increasingly use the courts to attempt to collect back rent from tenants as they face mounting pressure from lenders.
A moratorium that protects certain tenants from eviction through the end of 2020 has also spurred litigation; 26 lawsuits have been filed by property owners who assert that the moratorium violates their rights.
Read the full article here.