What are your rights as a small business tenant when shopping centers are struggling across the country? It can be hard to keep up with the changes happening in retail, office, and healthcare service centers, particularly as we deal with the pandemic. Even before the challenges presented by COVID, retail space was often being left vacant for months – or years. Landlords are beginning to convert retail space for non-retail uses or close entire floors of shopping centers. Some are even halting operations entirely with the hope of eventually redeveloping the property.

A photograph of an mall with no people.In an ideal scenario, a lease may have a favorable co-tenancy clause that provides immediate rights. But even without a co-tenancy provision, tenants often have other protections under the lease and under the common law. When faced with a failing shopping center, you should follow three steps to evaluate its rights against the landlord.

Step One

You should determine whether there is a co-tenancy provision in the lease, and if so, you should monitor the landlord’s compliance with the co-tenancy requirements regularly. In the event of a co-tenancy failure, you should assert its rights under the lease as quickly as possible.

Step Two

Evaluate whether there are other provisions in the lease that might offer protection. More general obligations and covenants in the lease may also offer grounds for relief against the landlord.

Step Three

You should think beyond the lease language. State common law may offer additional protection to a tenant when a shopping center fails.

We can’t avoid the current downturn in the economy, but we can take action to assert our rights against landlords when shopping centers begin to fail. All three of the outlined steps are crucial for properly evaluating your rights as a tenant. Over the next two weeks, we’ll be releasing a series of blog posts to discuss co-tenancy rights, other provisions, and common law rights. These links explore the topics in greater depth and walk through what options are available to you.

If you have any questions or want additional information, NRTA would be happy to help. You can contact the office at (413) 525-4565 or by filling out this form.