West Pueblo Partners, LLC v. Stone Brewing Co.
Facts: A commercial tenant’s lease agreement entered into with the landlord contains a force majeure provision. The tenant does not pay rent due to government closure orders during the COVID-19 pandemic which interfered with the tenant’s use of the property causing the tenant to operate at a loss. The tenant had funds available to pay rent at all times. The landlord seeks to evict the tenant in an unlawful detainer (UD) action based on a notice to pay rent or quit.
Claim: The tenant claims they are not delinquent in the payment of rent as they were excused from paying rent during the months their business was closed due to the pandemic, a force majeure event which triggered application of the provision.
Counterclaim: The landlord claims the force majeure provision does not apply since the tenant retained the financial resources to pay the delinquent rent and occupied the property throughout the period of delinquency.
Holding: A California appeals court holds the landlord is entitled to enforce the UD action since the force majeure provision does not apply as the tenant had the financial resources to pay the delinquent rent through the period of delinquency. [West Pueblo Partners, LLC v. Stone Brewing CO., LLC. (2023) 90 CA5th 1179]
West Pueblo Partners, LLC v. Stone Brewing Co.
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Real Estate Economics: Factor 25: Pandemic
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Word of the Week: Force Majeure
