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COVID-19 and Lease Negotiations: Tenant Security
Next in series of articles that will examine specific aspects of the COVID shift in which commercial lease negotiations are seeking protection against unlikely events. Part 2 focuses on guaranties and security deposits.
Ensuring that a tenant's obligations under a commercial lease are adequately secured has always been an important part of the leasing process. Without proper security, many of the remedies in a lease may not be worth the paper they are written on: if the tenant's coffers are empty, security may be the landlord's only financial recourse.
The COVID-19 pandemic underscored the importance of security. Huge numbers of tenants defaulted on their rent payments, while eviction moratoria left landlords with few remedies. Landlords who were well-secured had a distinct advantage.
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