Proposed law could allow ailing California restaurants to terminate lease agreements (Via EaterLA)
Not only would the bill put in place a commercial eviction moratorium for businesses and non-profits, it “creates space for hospitality businesses to renegotiate rent where capacity has been slashed due to social distancing,”Under the bill, if landlords and tenants can’t agree on a new rent that takes into account decreased sales due to the stay-at-home orders, tenants would be able to single-handedly terminate the lease — allowing operators to avoid lawsuits or bankruptcy.
The bill excludes publicly traded companies from terminating leases, which means many larger chain restaurants, like Cheesecake Factory —outlined specific guidelines for restaurants hoping to reopen their dining rooms to customers in the coming weeks and months, including disinfecting tables, ordering ahead, and separating tables by at least six feet. Despite the progress in guidelines, LA County has signaled that the stay-at-home orders could remain in place until, leaving many Los Angeles restaurants and bars to wonder when they’ll be able to reopen dining rooms.
The proposed bill would certainly give a lifeline to eating establishments for one of their largest expenses — rent — but it contains no provisions for landlords, who could still be on the hook for mortgage payments. Ultimately, Wiener tweeted, the point of the bill is to incentivize negotiated rents: “We want these business to survive. It’s in all of our interest, including the landlords.”
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