Over the past year, real estate practitioners have monitored the steady stream of court decisions concerning the COVID-19 pandemic’s effect on commercial tenants’ rental obligations. (Indeed, we discussed and summarized some of these rulings in our Dec. 2, 2020 and Feb. 2, 2021 columns.) As New York proceeds slowly but surely toward a semblance of pre-pandemic normalcy, the latest such decision signals that the era of COVID-related defenses to commercial rent nonpayment may soon become a thing of the past.
In a comprehensive May 19, 2021 decision and order issued in A/R Retail LLC v. Hugo Boss Retail, Inc. (Supreme Court, New York County, Index No. 158385/20) (the “order”), the court framed the overarching question as “whether the adverse financial impact of the COVID-19 pandemic on tenant’s business, including government orders restricting consumer access to the retail store, should relieve tenant of the obligations under its lease with plaintiff” (order at 1).