Please read the article I wrote on "rent abatement" for business best-practices magazine Restaurant Startup & Growth.
During the COVID-19 crisis, small businesses, including restaurants, are struggling to stay in business with minimal customer traffic by cutting incremental and overhead expenses. The article discusses how to approach abatement of rent through negotiations with your landlord, as well as the effect of "forcemajeure" clauses in lease contracts.
My article recommends small business owners negotiate these terms with their landlords, who can borrow money from the SmallBusiness Administration at low interest rates to cover their loses. Hopefully, they will be temporary.
In California, municipal government has taken matters into their own hands. As noted in an article last year:
In March, Los Angeles, San Francisco, San Diego and other cities eitherpassed or are planning to pass some sort of temporary moratorium on evictions forcommercial tenants, either because their business has been slowed down or it has been ordered to close to prevent the spread of thepandemic.
As noted in the article, cities are not typically allowed to regulatecommercial evictions; however, per an executive order signed by the governor of California, they are allowed to do so.
Should government step in to prohibit eviction ofcommercial(not residential) tenants or should government provide funding to helpcommercial landlords and tenants negotiate the terms of their agreement during this hopefully temporary crisis?If landlords can't pay their bills -- including insurance, utilities, and maintenance -- they might go out of business and have to shut down their properties.
Apply an ethical argument and consider all the stakeholders .
liestaurantOWNElltom Does Reopening Your Restaurant in the Midst of the Pandemic Expose You to Guest Liability? By Barry Shuster man-ng u... mchn-qumummuw run.muupuuu .wumunup As an operator. you likely have concerns about reopening your restaurant during the pandemic that go well beyond your health and the health of your crew. Indeed, RestaurantOwner.com members have asked if DEMO19 will expose them to lawsuits led by guests claiming to have contracted the disease while patronizing their restaurants. Additionally, they've asked if there is any 'disclaimer' language they could post to shield them from liability. The answers to these questions require some explanation. I will toss a little legaiese at you, but try to define it in basic terms. Food for Thought Perhaps as an analogy, although imperfect, are food-borne illness claims. These are common complaints against restaurants, and occur when a guest claims he became ill from the food served by the restaurant. They are unsettling for the operator, but often difcult for the guest to prove, particularly if no one else eating in the restaurant experienced the same symptoms. People suffer from gastric disorders for a variety of reasons and can pick up pathogens anywhere. On the other hand, if a significant number of previously healthy guests on any given day fell ilL it could mean someone in the restaurant failed to use ca re inspecting or preparing the food, and invite a \"negligence\" lawsuit. In that case, you would \" As states allow the gradual reopening of on-premises restaurant dining, guests remain wary of taking a seat rather than grab and go. According to 'Eating 2020: How COV ID-19 Will Change Consumer Engagement With Food', a national survey of 1,300 consumers conducted by Ohio Inspire PR Group and market research rm Illuminology, 3:396 percent of diners are extremely or very worried about getting sick from other customers if they eat a meal inside a restaurant. Do you have liability if a guest Wm! Does Reopen-1g fol-Haslellanllihliidslatlha Mam: bxpoan Yuuln Liuaat Law! RestaurantOWNElltom unuke toodoorne Illnesses. even wnen operators tastioiously exercise every CDVID-l? health and safety measure recommended by government health authorities, it is impossible to screen every guest who might be infected. Especially since there is evidence COVID-lg can be carried and transmitted by those showing no symptoms of the disease. Not unlike a foodborne illness claim, however, a guest who claims he contracted (QUIET-19 at a restaurant would have to prove both he contracted the disease at the restaurant and the restaurant failed to exercise reasonable care in avoiding transmission of the virus. Well-documented compliance with COVE-19 health authority recommendations and requirements would go a long way in undermining such claims. Assumption of Risk The plaintiff (the person bringing the lawsuit) might also have to overcome an "assumption of risk' defense. This is raised when someone knowingly and voluntarily assumes certain risks. The strong est evidence is a 'liability waiver' signed by the would-be plaintiff. These documents contain "exculpatory language' that frees one party of certain liability that may occur as a result of the agreement and waives the rights of the other party to bring a claim for his injuries. Many state courts uphold these agreements. with which you might be familiar. We are presented with liability waivers when joining gyms, where there is risk we might injure ourselves. or when we participate in potentially dangerous activities like scuba diving or skiing. That said, few, if any, restaurateurs would be willing to require their guests to read and sign a lengthy document prior to being seated. Other forms of exculpatory language include written warnings. If you've ever seen a 'No Lifeguard on Duty' sign at a hotel swimming pool, you are aware of posted "exculpatory language'. If conspicuous the warnings might offer proof swimmers accepted a certain level of risk of drowning by entering the pool or allowing their children to so. We see such warning Labels on everything from plastic bags to ladders to backyard trampolines. Language you might post in your restaurant or on your menu to shift the assumption of risk of infection to your guests might read: RestaurantWNElitom donning masks. strict social distancing, and efforts to prevent indirect transmission such as one-time-use menus and absence of Linens and table condiments. in some cases, courts have found assumption of risk doesn't require express written agreements or warnings because it ' is implied when the risk is particularly obvious. Even without express warning, one might make an argument people are taking a risk for contracting communicable diseases. even the common cold and influenza, any time they congregate in a public space. There are other possible defenses, including contributory and comparative negligence, which can bar claims if the plaintiff's actions are in part responsible for his injuries. An example would be a guest who ignores social distancing requirements in the restaurant. These would be matters for your attorney to consider if such a claim arose. As you are likely aware, insurance is critical to a risk management backstop. Even if a guest brings a baseless suit against your restaurant, you are likely to need a lawyer to handle and get it dismissed. One of the benefits of your general commercial liability in5urance is the insurer assigns legal counsel to represent its interests in covered claims. it might be prudent to review your policy and contact your insurer to make certain there are no specific exclusions for guest claims arising from CDVID-19. Although the pandemic seems to have dragged on forever, restaurant re-openings are relatively recent, and at the time of this writing there is little if any news regarding town-19 related claims by restaurant guests. As with every aspect of the Law, trends can emerge quickly and vary from state to state. You are advised to seek local counsel and discuss the matter with your insurer to determine your liability These claims could arise as restaurants reopen. Hopefully. this article will help you have a productive conversation with your legal counsel and insurer on this issue. @2011 RestaurantOwner.com All Rights Reserved
