Thursday, February 18, 2021
During the COVID-19 pandemic, many retail tenants have been affected by governmental orders prohibiting or limiting their business operations. Tenants seeking rent relief under their leases have raised various defenses to their obligations to pay rent, consisting of the common law doctrines of impossibility of performance, frustration of purpose, or the application of force majeure clauses in their leases.
This month, a Superior Court judge, in the case of
UMNV 205-207 Newbury, LLC v. Caffé Nero Americas, Inc., issued the first court ruling in Massachusetts addressing a tenant’s defense to the obligation to pay rent during a government-ordered shutdown. The court ruled that Caffé Nero’s obligation to pay rent was discharged under the doctrine of frustration of purpose, while the restaurant was barred from allowing customers to drink or eat inside its premises from March 24 to June 22, 2020, by the Governor’s Order prohibiting “on-p