To promote rental housing in India, the government has formulated a draft policy, the Model Tenancy Bill, 2020, to make the transaction beneficial to both landlords and tenants. The provisions established under this model policy should be the guiding principles for drafting a lease agreement. According to the union`s housing minister, the policy, which is expected to soon replace existing rental housing laws across India, will be unlocked through a crore unit in India`s rental housing markets. 3. Explicit mitigation rights: Some leases allow a tenant to reduce rent for any event that makes it impossible or impossible for the tenant to use all or part of their premises (including government restrictions on use or operation), and if the tenant does not use all or part of the premises, the tenant may be entitled to a total or partial rent reduction during the non-use period. For example, a restaurant tenant who can only serve customers for delivery or roadside pickup may require a rent reduction for everyone except their kitchen, if not for the entire premises. 1. Check the force majeure clause – who does it cover, what does it cover, what are the remedies, is there an obligation to inform the other party and, if so, when should this happen? Is there a time limit on how long a party can use force majeure as a protective shield? 2. Insurance Coverage: Almost all commercial leases require the tenant to purchase property insurance for their personal belongings.

Many property insurance policies offer some coverage for loss of business income related to physical damage to insured property and often cover up to 12 months of business income. Policies vary and it`s unclear whether COVID-19 business losses are covered. As the courts slow down by the pandemic, clarity will be slow to arrive, and tenants should act quickly to consult with insurance professionals and legal advisors to assess coverage. In addition, there is growing political pressure to require insurers to fund COVID-19-related business losses, and tenants should be watching these developments closely. Repairs: The agreement must specify who bears the costs associated with wear and tear. In the context of a commercial lease, the force majeure provision generally provides a mechanism for postponing or suspending the performance of an obligation under the lease due to unforeseeable circumstances beyond the control of a party. A landlord and tenant will include a force majeure provision in a commercial lease to spread the risk between them in the event that an unforeseeable event makes the performance of a part impossible or impractical. In the event that a commercial lease does not contain a force majeure clause, the interested party has no contractual basis for invoking excuses for delay or non-performance; however, he may have a just claim according to the doctrines of frustration or impossibility.

See also: Arbitration clause in leases and how it can help landlords and tenants Here is a relatively simple clause, with a distinction between political and other force majeure and the resulting consequences: – Force majeure clauses exist to protect the parties from matters that cannot reasonably be foreseen, and the courts hate to maintain a defence against force majeure, which is based on matters that were known or reasonably foreseeable to the parties at that time and whose agreement has been executed. Therefore, with respect to new leases or lease changes negotiated during the COVID-19 pandemic, landlords and tenants must consider the impact of COVID-19 considered by the parties at the time of lease execution. For landlords and tenants, this means addressing holdback issues when tenants move into new spaces, potential delays in preparing and approving plans and specifications, approval and inspection delays, material and labor shortages, and government regulations that severely restrict or prohibit construction activities and most day-to-day business operations, and carefully draft rental terms that reduce the financial burden of minimizing parties if performance is delayed or made impossible. including the landlord`s or tenant`s termination rights in some cases. See also: The most important clauses for each lease A force majeure clause may contain a list of events – force majeure, lockout, strikes, riots, lack of manpower or equipment, war, terrorism, unavailability of public services, actions of a government agency, pandemic or epidemic – or it may generally indicate “unforeseeable events” or “events beyond the reasonable control of the affected party”. Even without the inclusion of specific “pandemic or epidemic” language in the list of unforeseen events, a typical force majeure clause may apply to the parties` non-monetary obligations under a lease in connection with a COVID-19-related disruption of performance. This claim is particularly appropriate if your force majeure clause contains a general “catch-all” provision such as “events beyond the reasonable control of the party concerned”. Maintenance: The agreement must clearly indicate who is responsible for paying the monthly maintenance fee. The provisions relating to force majeure vary depending on the jurisdiction (civil law countries usually have a specific definition of force majeure in the law) and the project. This page contains examples of force majeure clauses resulting from agreements on this site. For more information, see Force Majeure Clauses – Checklist and Sample Wording.

The lease must include the names and addresses of the landlord and tenant, the terms of the lease, the rental period, the rent and the amount of the deposit, the restrictions imposed on both parties, the conditions for terminating the contract, the conditions for renewal and details of who should bear other costs such as maintenance costs, repairs, etc. Subject to clause [ ], if a Party wishes to seek protection in respect of a case of force majeure, it shall, subject to clause [ ], inform the other Party of the nature and expected duration of such force majeure event as soon as possible after the occurrence or commencement date of such force majeure and keep the other Party informed thereafter; until it is able to fulfil its obligations.