The biggest mall owner in the country Simon Property Group is suing one of its biggest tenants, Gap, for failing to pay more than $65.9 million in rent and other charges during the coronavirus pandemic.
The court battle highlights the mounting tension between retail landlords and their tenants, many of which had stores forced shut due to the crisis and as a result stopped paying rent or paid less rent. Similar litigation is expected to ensue, real estate experts have said. And many landlords are also beginning to send default notices to retailers that have skipped payments, which could result in them forcing businesses out of their properties altogether.
Gap had also warned in late April that litigation could arise, as a result of its skipped payments. "Although we believe that strong legal grounds exist to support our claim that we are not obligated to pay rent for the stores that have been closed ... there can be no assurance that such arguments will succeed," the company said in a filing with the Securities and Exchange Comission at the time.
Representatives from Simon and Gap did not immediately respond to CNBC's requests for additional comment.
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