Skip to content
  • About Us
  • News & Insights
  • Member Directory
  • Job Board
  • Sign In
  • Join
Home > Thought Leadership > A Year of COVID-19: Negotiation and Litigation Trends in Massachusetts Leasing
Boston Chamber
  • Events
        • Events

          • Overview
          • Events Calendar
          • Chamber Awards
        • ...
          City Awake
          Make Your Voice Heard: Reimagining Nightlife with Corean Reynolds

          Corean Reynold was recently appointed the Director of Nightlife Economy for the City of Boston, where she brings a wealth of experience and a passion for fostering an equitable and thriving nightlife ecosystem.

          10/04/2023

          6:00pm - 7:30pm

          Roundhead Brewing Company

          arrow-go
          Read More
        • ...
          Government Affairs
          2023 Government Affairs Forum: State Treasurer Deborah B. Goldberg

          Don’t miss our upcoming Government Affairs Forum with Massachusetts State Treasurer Deborah B. Goldberg. Register now!

          10/11/2023

          9:45am - 11:00am

          Bank of America

          arrow-go
          Read More
        • ...
          Talent
          MA Apprentice Network Fall Quarterly Event

          Learn about new ways of utilizing the professional apprenticeship model to create diverse, sustainable, and scalable talent pipelines.

          10/12/2023

          10:00am - 11:30am

          Edenred

          arrow-go
          Read More
  • Learning & Development
        • Learning & Development

          • Overview
          • Call for Nominations
          • Resources
        • EQ to Elevate Workplace Well-being

          Designed for mid-level managers and supervisors, this new certificate program addresses workplace well-being through unique, innovative, and actionable methods.

          Read More
          Transformational DEI Certificate

          Join our Transformational DEI Certificate! Our comprehensive learning & development offerings are designed to connect and grow strong leaders who lead both inside and out of the office.

          Read More
          Women’s Leadership Program

          Our Women’s Leadership Program enables you to take your leadership to the next level by arming you with the most in-demand leadership toolkit.

          Read More
          Boston’s Future Leaders

          Our Boston’s Future Leaders (BFL) program provides emerging leaders with a socially conscious and civically engaged leadership toolkit, as well as the opportunity to apply their knowledge through experiential assignments.

          Read More
  • Economic Inclusion
        • Economic Inclusion

          • Overview
          • Economic Inclusion Committee
          • Fierce Urgency of Now Festival
          • Pacesetters
          • Resources
        • ...
          Economic Inclusion
          Economic Inclusion

          Our Economic Inclusion Committee provides strategic support around research, policies, and programs that are focused on building equal opportunity.

          arrow-go
          Read More
        • ...
          Economic Inclusion
          Pacesetters

          We are developing an ecosystem of corporations and partners with the influence and buying power to transform economic inclusion for minority business enterprises (MBEs).

          arrow-go
          Read More
        • ...
          Fierce Urgency of Now Festival
          2023 Fierce Urgency of Now Festival

          The Fierce Urgency of Now Festival brings Boston’s diverse young professionals together with business leaders, organizations and their peers to build connection, advance careers and ignite positive change.

          09/12/2023 -

          09/16/2023

          Greater Boston

          arrow-go
          Read More
  • Policy & Impact
        • Policy & Impact

          • Overview
          • Leadership Councils
          • Amicus Advisory Board
        • GET INVOLVED IN OUR POLICY FOCUS AREAS

          Business Climate
          Read More
          Climate & Energy
          Read More
          Health Care
          Read More
          Housing & Development
          Read More
          Talent
          Read More
          Transportation
          Read More
  • Our Networks
        • GBCC’s Networks

          • Overview
        • OUR NETWORKS

          City Awake

          City Awake empowers young professionals in a variety of ways that encourages these rising leaders to stay invested in the region’s future success.

          Read More
          BIMA

          BIMA (the Boston Interactive Media Association) serves a vibrant community of like-minded professionals from agencies, brands, publishers, and ad-tech companies with business interests in the New England market.

          Read More
          Women’s Network

          For nearly 30 years, the Chamber’s Women’s Network has connected female professionals of all background and career levels. Today, our Women’s Network is the largest in New England, strengthening the professional networks of women each year.

          Read More
          Massachusetts Apprentice Network

          The Massachusetts Apprentice Network convenes employers, training providers, and talent sources interested in developing and implementing apprenticeship programs in occupations across industries and statewide in fields such as tech, advanced manufacturing, healthcare, financial services, and more.

          Read More
          Pacesetters

          We are developing an ecosystem of corporations and partners with the influence and buying power to transform economic inclusion for minority business enterprises (MBEs).

          Read More
          Small Business

          We support small business through public policy initiatives, events designed to connect small businesses in Greater Boston to their peers and established business leaders, professional development offerings, and free small business advising.

          Read More
  • Membership
        • Membership

          • Overview
          • Membership Benefits
          • Membership Levels
          • Member Stories
          • Request a Meeting
          • Join Today
        • Our Impact
        • About Us
          Our Impact

          Explore our mission and values to better understand how we are leading the business community forward.

        • Membership Directory
        • Membership Directory
          Not sure if you’re a member?

          Our member directory is your resource to discover, connect, and engage with Boston’s businesses from every industry and sector.

        • For our members

          • Member Resources
          • Member Deals
          • Sponsorship Opportunities
          • Connect with your Member Services Rep
          • Sign In
  • join
Bostonchamber
Boston Chamber
  • Events
        • Events

          • Overview
          • Events Calendar
          • Chamber Awards
        • ...
          City Awake
          Make Your Voice Heard: Reimagining Nightlife with Corean Reynolds

          Corean Reynold was recently appointed the Director of Nightlife Economy for the City of Boston, where she brings a wealth of experience and a passion for fostering an equitable and thriving nightlife ecosystem.

          10/04/2023

          6:00pm - 7:30pm

          Roundhead Brewing Company

          arrow-go
          Read More
        • ...
          Government Affairs
          2023 Government Affairs Forum: State Treasurer Deborah B. Goldberg

          Don’t miss our upcoming Government Affairs Forum with Massachusetts State Treasurer Deborah B. Goldberg. Register now!

          10/11/2023

          9:45am - 11:00am

          Bank of America

          arrow-go
          Read More
        • ...
          Talent
          MA Apprentice Network Fall Quarterly Event

          Learn about new ways of utilizing the professional apprenticeship model to create diverse, sustainable, and scalable talent pipelines.

          10/12/2023

          10:00am - 11:30am

          Edenred

          arrow-go
          Read More
  • Learning & Development
        • Learning & Development

          • Overview
          • Call for Nominations
          • Resources
        • EQ to Elevate Workplace Well-being

          Designed for mid-level managers and supervisors, this new certificate program addresses workplace well-being through unique, innovative, and actionable methods.

          Read More
          Transformational DEI Certificate

          Join our Transformational DEI Certificate! Our comprehensive learning & development offerings are designed to connect and grow strong leaders who lead both inside and out of the office.

          Read More
          Women’s Leadership Program

          Our Women’s Leadership Program enables you to take your leadership to the next level by arming you with the most in-demand leadership toolkit.

          Read More
          Boston’s Future Leaders

          Our Boston’s Future Leaders (BFL) program provides emerging leaders with a socially conscious and civically engaged leadership toolkit, as well as the opportunity to apply their knowledge through experiential assignments.

          Read More
  • Economic Inclusion
        • Economic Inclusion

          • Overview
          • Economic Inclusion Committee
          • Fierce Urgency of Now Festival
          • Pacesetters
          • Resources
        • ...
          Economic Inclusion
          Economic Inclusion

          Our Economic Inclusion Committee provides strategic support around research, policies, and programs that are focused on building equal opportunity.

          arrow-go
          Read More
        • ...
          Economic Inclusion
          Pacesetters

          We are developing an ecosystem of corporations and partners with the influence and buying power to transform economic inclusion for minority business enterprises (MBEs).

          arrow-go
          Read More
        • ...
          Fierce Urgency of Now Festival
          2023 Fierce Urgency of Now Festival

          The Fierce Urgency of Now Festival brings Boston’s diverse young professionals together with business leaders, organizations and their peers to build connection, advance careers and ignite positive change.

          09/12/2023 -

          09/16/2023

          Greater Boston

          arrow-go
          Read More
  • Policy & Impact
        • Policy & Impact

          • Overview
          • Leadership Councils
          • Amicus Advisory Board
        • GET INVOLVED IN OUR POLICY FOCUS AREAS

          Business Climate
          Read More
          Climate & Energy
          Read More
          Health Care
          Read More
          Housing & Development
          Read More
          Talent
          Read More
          Transportation
          Read More
  • Our Networks
        • GBCC’s Networks

          • Overview
        • OUR NETWORKS

          City Awake

          City Awake empowers young professionals in a variety of ways that encourages these rising leaders to stay invested in the region’s future success.

          Read More
          BIMA

          BIMA (the Boston Interactive Media Association) serves a vibrant community of like-minded professionals from agencies, brands, publishers, and ad-tech companies with business interests in the New England market.

          Read More
          Women’s Network

          For nearly 30 years, the Chamber’s Women’s Network has connected female professionals of all background and career levels. Today, our Women’s Network is the largest in New England, strengthening the professional networks of women each year.

          Read More
          Massachusetts Apprentice Network

          The Massachusetts Apprentice Network convenes employers, training providers, and talent sources interested in developing and implementing apprenticeship programs in occupations across industries and statewide in fields such as tech, advanced manufacturing, healthcare, financial services, and more.

          Read More
          Pacesetters

          We are developing an ecosystem of corporations and partners with the influence and buying power to transform economic inclusion for minority business enterprises (MBEs).

          Read More
          Small Business

          We support small business through public policy initiatives, events designed to connect small businesses in Greater Boston to their peers and established business leaders, professional development offerings, and free small business advising.

          Read More
  • Membership
        • Membership

          • Overview
          • Membership Benefits
          • Membership Levels
          • Member Stories
          • Request a Meeting
          • Join Today
        • Our Impact
        • About Us
          Our Impact

          Explore our mission and values to better understand how we are leading the business community forward.

        • Membership Directory
        • Membership Directory
          Not sure if you’re a member?

          Our member directory is your resource to discover, connect, and engage with Boston’s businesses from every industry and sector.

        • For our members

          • Member Resources
          • Member Deals
          • Sponsorship Opportunities
          • Connect with your Member Services Rep
          • Sign In
  • join
  • About Us
  • News & Insights
  • Member Directory
  • Job Board
  • Sign In
  • Join

A Year of COVID-19: Negotiation and Litigation Trends in Massachusetts Leasing

March 16, 2021

Lease Modifications

After a short period of complete uncertainty in March and April 2020, a handful of landlords and tenants smartly negotiated modifications of their existing leases to establish new lease terms for the remainder of the calendar year and in some cases well beyond. Such lease modifications in the past six months have included the following:

  • Rent Deferral – Deferral of rent payments for a short period (e.g. 1 to 3 months). The tenant would repay the deferred amount by spreading out smaller payments during the remainder of the lease term. Alternatively, the lease term would be extended for the same length as the rent deferment and the tenant would repay the deferred amount during the newly created extension period. This has been the most commonly agreed upon lease modification during the pandemic.
  • Rent Abatement or Rent Reduction – Payment of reduced rent or a rent abatement for a short period. The reduced or abated rental amount would also be repaid by the tenant in the same manner as described for a rent deferment. However, landlords have not been too keen to permit full rent abatement unless there were special circumstances at play. For example, with numerous business closures, certain landlords have not been able to comply with a special requirement in some retail leases that a certain percentage of other tenants at a property be open and operating (known as a co-tenancy requirement)–a failure of such a requirement often results in a rent reduction for the tenant. Landlords with a potential co-tenancy issue have been much more willing to provide a short-term rent abatement or reduction in exchange for the tenant’s waiver of the co-tenancy requirement.
  • Percentage Rent (Retail Tenants Only) – Converting the monthly payment of standard rent payments for a retail tenant into monthly payments which are a percentage of a retail tenant’s actual gross sales at the leased premises. While many retail tenants (especially restaurants) proposed this type of alternative rent when the pandemic began, landlords for the most part have rejected this modification. In particular, landlords have not wanted to deal with the administrative burden of reviewing gross sales records and calculating percentage rent.
  • Reduction of Space – Reducing the space occupied by a tenant in exchange for lower rent. In certain situations (e.g., another tenant is considering space in a building) landlords have taken back a portion of an existing tenant’s premises. The existing tenant can reduce its rental obligation while the landlord is then able to provide the total space required by a new tenant. For many landlords and tenants, this modification has been a “win-win” situation; however, it is not always an option because it relies on the landlord needing to recapture space to make room for another tenant.

Litigation Trends

It is no secret that many retailers have been unable to pay their full rental obligations (and some in no position to pay any rent). While some landlords and tenants have been able to reach agreement on one or more of the modifications described above, in many cases no resolution is reached. As a result, the court systems across the United States are filling up with rent payment disputes between landlords and tenants. The decisions in these cases have shaped how landlords and tenants negotiate rent modification agreements.

Most courts have so far found in favor of landlords which has led to some landlords being less incentivized to strike a deal with their struggling tenants. However, a recent February decision in the Massachusetts Superior Court found a judge bucking this trend by ruling in favor of a tenant operating as a café, sending a jolt through the commercial landlord-tenant community. In UMNV 205-207 Newbury, LLC v. Caffé Nero Americas Inc., the trial court excused the tenant café’s obligation to pay rent during the period of Governor Charlie Baker’s shutdown order, with the judge basing his decision on the application of an old legal doctrine known as “frustration of purpose”. Under this doctrine, when a party’s primary purpose under a contract is materially frustrated (through no fault of their own) by the occurrence of an unforeseeable event, then the party’s obligations under the contract are discharged. While this case is only a lower court decision that could be overturned on appeal, it has served as a wake-up call for the Massachusetts real estate community. Other cases could be decided in a similar fashion as more landlord-tenant disputes work their way through the court system. Litigation will surely continue well after the pandemic is over and can change how parties approach lease modification discussions.

Conclusion

The commercial real estate industry in Massachusetts has experienced its fair share of twists and turns courtesy of the COVID-19 pandemic. Even with an end seemingly in sight, there is simply no way to predict when normalcy will return (and it will not be an overnight process). Open dialogue and cooperation is still the best path to negotiating a mutually beneficial solution to get through the pandemic and eventually return to business as usual. It is the one way for landlords and tenants to achieve a little bit of certainty amidst the unpredictability of the pandemic and the legal landscape still coming into focus. 

Our guest blogs are written and produced by organizations within our membership. They  are not intended to reflect the views nor opinions of the Greater Boston Chamber of Commerce.

Eric is a partner in the Boston office at Seyfarth Shaw. He also serves as co-chair of the national Leasing practice and focuses his work on commercial, retail, and office leasing. Real estate clients faced with aggressive growth goals look to Eric when they need to increase their number of leased or owned sites, retail locations, and office locations. As a certified Six Sigma Green Belt, Eric uses project management, process improvement, and technology in all aspects of his legal practice. He works collaboratively with clients to develop a programmatic and innovative approach to their real estate portfolios. His collaborative client relationships have been recognized with accolades and awards from the Association of Corporate Counsel (Value Co-Champion Award), The American Lawyer (Best Client/Law Firm Team Award) and The Financial Times (Innovation in Collaboration Honor).

265 Franklin Street
Suite 1701
Boston, MA 02110
Get Directions
Contact us
  • Events
  • Learning & Development
  • Economic Inclusion
  • Policy & Impact
  • Our Networks
  • Membership
  • join
  • About Us
  • News & Insights
  • Member Directory
  • Job Board
  • Sign In
  • Privacy Policy
  • Terms & Conditions

© 2022 Greater Boston Chamber of Commerce. All Rights Reserved.

Popular Resources

  • News & Insights  
  • Member Resources  
  • Small Business  
Close