News/Events/Blogs

Many businesses affected by COVID-19 and the related shelter-in-place orders are turning to their business interruption insurance policies in hope of finding relief. In general terms, a business interruption insurance policy replaces some or all of a business’s income when the business is forced to curtail or cease its operations as the result of a disaster. In the vast majority of cases, insurance companies have turned away COVID-related business interruption claims, claiming that these policies do not provide coverage for COVID-related claims.

While the effects of the COVID-19 health crisis have impacted daily life for months, the legal implications of this pandemic are just starting to develop. Unforeseen conditions often wreak havoc on existing contractual relationships, which are typically based on factual assumptions that, due to unexpected conditions like COVID-19, may no longer be appropriate. Many parties work through these circumstances through negotiation, reconciling their previous expectations and current conditions with their desired outcome, but these negotiations aren’t always successful.

Unlike the Great Recession in 2008, landlords and tenants responding to the negative economic impact of the COVID-19 health crisis appear to be focusing more on rent relief as opposed to strict interpretation and enforcement.  Both sides seem to acknowledge that this downturn is driven by external, uncontrollable influences, and therefore each side should cooperate to weather the storm. It is the approach we most strongly encourage our clients to take, as it strengthens the relationship between landlord and tenant and avoids unnecessary expenditures on costly lease enforcement.

Landlords and property managers have massive amounts of guidance materials available to them as they prepare to reopen their properties. These materials detail many different things a property owner can do.  In the face of this, the question being asked by many owners is: what are they actually required to do, what is their legal duty?  Unfortunately, the answer is both fact- and circumstance-specific, taking into account the property and its users, as well as federal,

On June 4, 2020, the Internal Revenue Service published Notice 2020-39 (Notice) which provides relief to qualified opportunity funds (QOFs) and their investors in light of the COVID-19 pandemic.  Here is a summary, and more details follow below:

• Investors who otherwise would be required to reinvest capital gains into a QOF any time this year on or after April 1 now have until December 31, 2020 to reinvest such gains.

As the first of the rent moratoriums are expiring, landlords throughout California are eager to file unlawful detainer actions to obtain possession of their properties from tenants who have failed to pay rent or comply with repayment obligations. While it is natural for landlords to want to immediately initiate unlawful-detainer proceedings, they should proceed with caution. Landlords who issued 3-day or 30-day notices to their tenants for failure to pay rent during the moratorium period would be wise not to rely on those notices as the basis of an unlawful detainer action.

On June 5, 2020, President Trump signed into law H.R. 7010 – the Paycheck Protection Program Flexibility Act of 2020 (“PPPFA”). The PPPFA makes significant borrower favorable amendments to the Paycheck Protection Program (“PPP”).

Background.

As our readers know, the PPP loan program was enacted pursuant to the CARES Act as a tool to help small businesses keep employees on their payroll. The draw of the program is the ability for borrowers to have the loans forgiven.

Over the past several months, the COVID-19 health crisis has affected everyday life by a magnitude that is hard to fathom. Routine tasks, such as going to the grocery store or walking the dog, suddenly necessitate precautions like face masks, social distancing, and excessive amounts of sanitizer. Unemployment is near record levels, businesses have shuttered, and most of us are confined to our homes to avoid further spreading the COVID-19 disease.

Yet while most of us have adjusted to the “new normal” and cities and counties begin to reopen,

On Friday May 15, 2020, the Small Business Administration (“SBA”) released the application borrowers will use to request forgiveness of their Paycheck Protection Program (“PPP”) loans.  On Friday May 22, 2020, the SBA and Treasury jointly issued an Interim Final Rule clarifying some portions of the forgiveness application.  PPP borrowers have been awaiting additional guidance regarding the forgiveness portion of the program for well over a month.  While the application and interim final provides some additional guidance,

Small Business Administration (SBA) guidance published on May 13, 2020 adds clarity to the “necessity” certification that borrowers were required to make when applying for Paycheck Protection Program (PPP) loans.  According to this guidance, borrowers that received PPP loans of less than $2 million will be deemed to have made the necessity certification in good faith.  As to borrowers with loans greater than $2 million, if the SBA notifies the borrower that the SBA has determined that the borrower lacked an adequate basis for the necessity certification,