Proposed New Law Will Allow Restaurant-Bars to Get Out of Lease

 In Real Estate
1. Proposed New Law Will Allow Restaurants-Bars to Get Out Of Lease

Under Senate Bill 939, California could allow businesses especially independent restaurants, bars and cafes to get out of their lease. Not only would this bill put in place a commercial eviction moratorium, for businesses and non profits it creates space for hospitality businesses to re-negotiate rent where capacity has been slashed due to social distancing. The bill would prohibit all commercial evictions during the pendency of the stay at home emergency orders.

Under the bill, if landlords and tenants cannot agree on a new rent that takes into consideration the decreased sales due to stay at home orders, tenants would be able to singlehandedly terminate the lease without penalty.

This bill excludes publicly traded companies, which means larger chain restaurants.

2. Governor Newson Sign Executive Order Creating Rebuttable Presumption of  Employee Who Contracted Virus Received the Virus at Work

On May 6, 2020, the Governor changed the burden of proof when it comes to Covid-19 virus cases by requiring the employer to prove that the worker did not contract the Covid-19 virus while at work. The presumption will be in effect for 60 days following the order.

Comment: This shifts the burden of proof to the employer. The impact could strain employers financially and cause difficulty in misclassification cases for the employers regarding independent contractors versus employees. In my opinion, this will slow employers’ timelines for bringing back their workforces on site. Why take the chance if any of your employees are presumed to have caught the virus at work to prematurely bring them back to work. In addition, people claiming their employees (and they have been misclassified as independent contractors) will be pushing their misclassification causes with the abundance of employment attorneys willing to take these leases on contingency.

About the Author

  • Scott Souders
    Scott Souders Attorney & Author


Scott Souders is a real estate attorney who has practiced real estate law in excess of 43 years in Southern California. The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.

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