Proposed Bill Allowing Retailers Out Of Leases Stuns Landlords

Bisnow (May 22, 2020) A proposed bill that would allow thousands of California businesses to walk away from their lease agreements may have some changes to it on the way. Introduced in March as a statewide commercial eviction moratorium and amended this month, Senate Bill 939 would allow hospitality tenants devastated by shelter-in-place orders a chance to terminate their leases if negotiations with landlords fall through. State Sen. Scott Wiener, a Democrat representing San Francisco, is one of the legislation's two sponsors. He said Thursday that some of the bill's impacts will be narrowed by amendments to come in a Senate Judiciary Committee hearing Friday.  "The way it's worded now went beyond what we intended," Wiener told Bisnow. "It can be read to apply to any small business, but it's about hospitality. So we're clarifying that, that it's restaurants bars, cafés, places of entertainment." Tony Natsis, an attorney with Allen Matkins and chair of the firm's global real estate group, said that if the bill went into effect, landlords would "definitely become risk-averse to signing leases with any of the protected tenant class in the future." "The existence of these negotiation dynamics is historically unprecedented in lease negotiations for obvious reasons," he said. Read More