Pandemic Clause Protections Becoming New Standard in Retail Leases

Prompted by the full and partial closures of New York City’s retail and restaurant industry amid the coronavirus pandemic, a growing number of retailers want a pandemic protection clause included in the lease to protect them in the event of a similar situation. Cited in example was a recent deal with Lower East Side Kossar’s Bagels & Bialys, the landlord agreeing to decrease the rent with the occupancy limitation mandated by city restrictions. Although “many pre-pandemic leases included a force majeure clause, which can relieve the tenant or the landlord of their obligations in the lease if circumstances beyond their control occur, like a natural disaster or “acts of God.” However, few of those agreements specified for a pandemic.