Shopping Center Damage Can Be Game Changer for Leases

It’s important to reevaluate your tenant restrictions after a post-disaster shakeup. Recent natural disasters and extreme weather have forced some tenants out of business or have forced them to relocate after their space has been damaged. And many shopping centers have felt the effects of a tenant shakeup. Aside from dealing with the financial aftermath, you should also take a good look at the new makeup of your center. Ask whether restrictions you’ve imposed at your center are still necessary after a disaster strikes; if you continue to enforce restrictions after a disaster removes the circumstances that prompted them, a tenant might claim that you’re being unreasonable or trying to constructively evict it from its space.

Parking restrictions are a prime example. Let’s say that before a disaster, your tenants complained that a busy tenant’s customers were taking up too many spaces in the center’s premium parking area. So you issued parking restrictions that allocated a set number of parking spaces to each tenant, based on the size of its store. A disaster later caused some tenants to leave, relieving the parking pressure on the remaining tenants. The busy tenant could ask a court to block the owner from enforcing the parking restrictions, given the changed circumstances.

So ask whether restrictions, such as for parking, are still necessary and change them if they aren’t. You’ll avoid having a court question whether it’s reasonable for you to enforce the restrictions if the impetus for them has dissipated. If resources at your center are being unused, a tenant could argue that continuing to restrict them is unfair and runs counter to its lease.