Rental Agreements Lockdown

The lockdown sent shockwaves through the economy. People`s ability to spend money is not what it once was. It also had a huge impact on the relationship between the landlord and the tenant. While tenants` ability to pay has been affected, landlords` profitability has also been disrupted. Tenants ask to give up the tenancy because they have not had access to their premises or because their income has been affected. One of these clauses could be a force majeure clause that deals with major circumstances that cannot be controlled, such as earthquakes, wars, etc. Where a rental agreement contains such a clause, careful consideration should be given to what is considered to be a case of force majeure and whether it applies to the current circumstances. This clause may also stipulate that the tenant does not have to pay rent if the tenant does not live in the property during the events of force majeure. Prominent figures like Bill Gates, former US President Barack Obama, are just a few examples of people who have warned the world of the need to prepare for a deadly pandemic. Whether COVID-19 and the resulting lockdown were „expected events“ and therefore „force majeure events“ would require some discussion. While lease agreements entered into prior to the SARS and H1N1 pandemics may be considered a force majeure event, as a pandemic such as COVID-19 was not an expected event, the resulting lockdown may not meet this requirement. This does not mean, however, that when the pandemic or lockdown arrives, the tenant would automatically have the right to suspend the payment of rent.