Commercial leases during COVID-19
Information and resources for tenants
Berkeley’s COVID-19 emergency response ordinance allows both residential and commercial tenants who have been impacted by COVID-19 to defer rent payments during the local state of emergency.
The ordinance does not permanently absolve tenants from their rent obligations. After the emergency ends, tenants who defer rent will still owe the back rent to their landlord unless they are able to negotiate new lease terms.
Deferred rent
Businesses and non-profits can qualify for deferred rent if they:
- had to close due to COVID-19
- have had to reduce operations to limited virtual, take-out, or pickup services only
- have suffered a material loss of income
Impacted tenants will have twelve months after the local state of emergency ends to pay back the rent they owe. Landlords may not charge late fees, fines, or interest on deferred rent during this period.
To qualify for deferred rent, tenants should notify their landlord no more than 7 days after rent is due. A simple written notification via email or mail is sufficient. Tenants do not need to provide documentation showing how the business was impacted by the pandemic in advance. However, it is important to save documentation such as bank statements or records of closure, as landlords may request this information when the state of emergency is over.
Personal liability protection
Individual business owners who were forced to close or limit capacity due to the pandemic are protected from personal liability for unpaid rent during the pandemic.
In Berkeley, landlords may not enforce personal liability provisions in commercial leases for rent or other charges a business was not able to pay between March 16, 2020 and July 30, 2021 due to being forced to close, limit capacity, or incur other costs as a result of COVID-19 emergency restrictions.
Legal resources for commercial tenants and landlords
The City cannot provide legal advice on lease negotiations. The organizations below may be able provide legal assistance or referrals.
For information on negotiating a percentage based rent or other rental fee structures that take into account earnings and landlord/tenant costs, see a webinar on Retail and restaurant lease negotiations during COVID-19 hosted by Northern California Small Business Development Centers.
Last updated September 30, 2021