Commercial and residential landlords and mortgage holders are being faced with some tough decisions. It is important to be start taking steps now to protect yourself and your business.
As of March 25, 2020, 19th Judicial District Chief Judge James F. Hartmann has ordered that matters regarding evictions and Rule 120 Orders for foreclosures will be postponed until after May 15, 2020. This applies to any matters that were pending at the time and those that may arise. This is a significant amount of time for a landlord or lender to have no payment enforcement option. We do not know if the government will step in to provide relief for either side of these transactions. However, you should not wait to find out what relief there may or may not be before considering possible solutions.
Now is the time to contact your attorney to review the terms in ALL of your written agreements to clarify each party’s rights and responsibilities. This includes loan documents, lease agreements, property management agreements, and any other contract associated with your properties. Your attorney will be able to guide you as to how the terms in each document may relate to the other documents.
Then start to open lines of communication. Don’t wait until someone is behind on their financial obligations. Begin to consider solutions that are sustainable by your business and can be reasonably fulfilled by your tenant or borrower. Ensure that the agreement is in writing, reviewed by your attorney for enforceability, and signed by all parties. Do not rely on a handshake, e-mail, or text message.
Realistically a mutually achievable solution may not be possible in every situation and a foreclosure or eviction may ultimately be required. If that time comes your attorney will be able to guide you through these options while keeping you apprised of the possible risks and developments in the law.
It will likely be many months before our economy is running at full steam. Don’t wait for potential problems to become insurmountable to act. Now is the time to plan for and address these potential problems.