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Landlord and Tenant Rights During The COVID-19 Pandemic

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Sherwood Law Group and its attorneys are constantly updating its clients about their rights during these uncertain times and in response to the COVID-19 Pandemic. So, what are your rights as a landlord or tenant in regard to the “coronavirus” and a pandemic? Below is a breakdown and summary where we try to answer those questions. As always, for questions or inquiries do not hesitate to contact Sherwood Law Group at 312.627.1650 or info@sherwoodlawgroup.com.

With the COVID-19 shutdown most likely to last for weeks if not months, many individuals and businesses may not have the money needed to make their monthly rental payments in full or on time. While there is a ninety (90) day moratorium on evictions, there is no timetable as to when the courts will re-open on a regular schedule. So, what are your rights as a tenant in the wake of the COVID-19 pandemic?

Does the COVID-19 pandemic qualify as a Force Majeure? 
 
A force majeure clause is a contractual provision found in many leases that excuses one or both parties from performing their obligations under the contract when circumstances arise that are beyond the parties’ control, leaving performance of the contract impractical or impossible. The question is, does the COVID-19 pandemic qualify as a force majeure, allowing renters to hold onto rent during the state-wide lockdown? Ultimately, it depends on the language in the contract. In Illinois, a key issue is whether the specific event claimed to be preventing performance is included in the lease agreement. For example, some force majeure clauses list “epidemics” or “pandemics” as force majeure events. If a listed force majeure event does occur, there is an implied duty on the claiming party to make an effort to attempt to resolve the event causing delay or inability to perform under the contract before invoking a force majeure clause. On the other hand, if a force majeure clause does not list epidemic or pandemic as a triggering event, COVID-19 may be covered as an act of governmental authority given that the Illinois governor instituted a state-wide lockdown to prevent the spread of COVID-19. In either event, if you’re having trouble paying rent and feel that your lease agreement may have a force majeure clause that includes the COVID-19 pandemic or have other questions or inquiries regarding landlord-tenant law, contact Sherwood Law Group at 312.627.1650 or info@sherwoodlawgroup.com.
 
Will the COVID-19 pandemic exempt tenants from paying rent or let them out of their lease agreement?

As of right now, Governor JB Pritzker has not called for a statewide rent freeze and so, any individual or company that fails to pay rent would eventually be subject to eviction. However, due to the Governor’s mandate all eviction orders are extended until April 30, 2020 which bans all evictions and utility shut offs for lack of payment. Thus, tenants are likely able to stay in their home and maintain possession for at least several weeks. The executive orders, however, do not relieve tenants of their obligation to pay rent and so, failing to pay could result in being subject to eviction after the executive orders expire. In the event that as a tenant you were to miss a rental payment, eviction cases cannot be heard until May 18, 2020 at the earliest and since it's against the law for landlords to evict tenants without a court order, tenants who cannot pay rent should be able to remain in their homes and maintain possession until at least May 18, 2020. As for whether a pandemic like the one we are experiencing now with COVID-19 will let you out of your lease, that issue is yet to be determined albeit it is unlikely. Although performance under a lease can be excused for an act of God such as a hurricane or earthquake, or an act of war, many Illinois lease contracts do not cover quarantines or pandemics.

So, what should you do if you can’t afford rent for reasons related to COVID-19?

At the end of the day, tenants should speak with their landlords about a compromise on rent going forward. Peter Cassel, Director of Community Development of MAC properties in Chicago said: “We are asking our renters to pay rent but we understand that there’s both a global public health crisis and a global economic crisis, and we understand that that has impacted our residents in a wide variety of ways. We’re encouraging residents who are having difficulty paying rent to contact us so that we can together go forward and continue in this agreement we both got into.” When talking to your landlord if you can come to an agreement, it’s important to make sure that the agreement is documented and memorialized by all parties via a rider, lease modification or entire new lease agreement. Tenants and Landlords should seek attorneys to ensure that agreement is properly entered into and memorialized. Alternatively, if you find yourself in a situation where you or your company cannot afford your rent and your landlord refuses to compromise, the best option is to speak to an attorney.

For questions or inquiries regarding all contractual disputes or landlord-tenant law contact Sherwood Law Group at 312.627.1650 or info@sherwoodlawgroup.com.

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