On April, 6, 2020, Governor Ducey signed a new executive order that temporarily prohibits a landlord under a commercial lease from taking any action to evict a tenant for its inability to pay rent due to the Covid19 pandemic. The only stated exception in this Order is if a court determines that stopping an eviction action would be contrary to the interests of justice. This exception is not clearly defined in the Order, but I expect it will be very narrowly construed by courts and applied only in a rare circumstance.
The executive order also implores commercial landlords to work with their commercial tenants to defer or modify rent due under a Lease, and to forego late fees, penalties and interest for late payment of rent. The order does not forgive rent due under a lease, so commercial tenants need to understand that non-payment of rent will have to be dealt with in some fashion — either in a written workout, or simply a delay in a landlord taking action to evict its tenant for non-payment. As a result, both commercial landlords and tenants should be proactive in attempting to reach a workout that complies with the executive order, while giving tenant sufficient time to weather the Covid-19 storm and remain in business.
Click here to view the official order…
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