Handling a Tenant Defaulting under a Commercial Lease amidst COVID-19

Jordan Uditsky • April 28, 2020

If my tenant won’t pay, what are my options? Prior to COVID-19 pandemic, landlords understood how to handle a defaulting tenant. But the legal landscape (along with everything else) is now in a constant state of flux, with legislators navigating through issues concerning health, economy and justice. In this article I’ll offer some clarification on landlord-tenant laws in light of the pandemic, focusing on commercial lease agreements.



A theme in the varying messages from our federal and state governments is that creditors need to relax when it comes to debt repayments. That sentiment carried into Illinois’ and other states’ messages addressing rent. Governor Pritzker, for instance, ceased eviction proceedings for residential properties. Tenants of the Chicago Housing Authority are relieved of their rent payments, at least until the end of the month. And Chicago’s mayor, Lori Lightfoot, urged private landlords to offer the same reprieve.


Yet commercial properties are conspicuously absent from the recent press. Does that mean that commercial landlords can evict a defaulting tenant? No, at least not in Cook County. Legal eviction relies on an operational court system. Due to the pandemic, courts are closed apart from emergency motions. And evictions fall short of meeting that “emergency” threshold. The chief judge of Cook County has a moratorium on evictions, and the Cook County sheriff won’t enforce eviction orders. Neither the chief judge nor sheriff distinguished between residential and commercial leases when making their announcements, so the effect is that all evictions must cease for a while.


Note, however, that ceasing evictions does not equate to ceasing rental obligations. Commercial leases are akin to business transactions between sophisticated parties. They are founded in contract law, giving the commercial lease agreement more control over resolving disputes than residential leases which have statutory and other equitable protections for tenants. Therefore, commercial landlords still have the right to enforce the lease obligations despite the pandemic.


Although the courts are closed, the case filing system is not. Commercial landlords can still file suit for breach of lease. Those lawsuits can be served on tenants through special process servers. Once served, tenants must still respond to the complaint within the statutory timelines. Filing and serving a lawsuit can afford the commercial landlord some leverage to negotiate now, or it can be queued for when the courts reopen if negotiations fail.


The decision to sue should never be taken lightly, and should be especially scrutinized given the hardships many are facing with the pandemic. Negotiation between landlord and tenant should be the first option in resolving commercial lease disputes. But if those talks don’t pan out, litigation remains a viable option. Landlords must still follow their contract terms when initiating dispute resolution. If properly handled, commercial landlords can seek monetary damages (which typically include their attorneys’ fees) and, eventually, an eviction.


If you have questions about handling a dispute with a commercial tenant or enforcing obligations under a commercial lease, talk to me or one of the experienced attorneys at GHU.

Options for Addressing Title Encumbrances in Loan Transactions

By Jordan Uditsky • January 4, 2022
An amendment to the Mechanics Lien Act (the "Act') permits the bonding over of mechanic's liens in the State of Illinois. The bill was signed into law ( 770 ILCS 60/38.1 ) on July 28, 2015, and went into effect on January 1, 2016. This statute is significant because it allows parties to "clear title" to real property that would otherwise be subject to a mechanic's lien. An eligible applicant will be permitted to substitute a bond for the real property subject to the underlying mechanic's lien so that the lien attaches to the bond instead of the real property. Who is Eligible? To take advantage of 770 ILCS 60/38.1 , the party desiring to bond over the lien must be an eligible applicant. The statute defines applicant relatively broadly to include the following parties: An owner; Other lien claimant; A party that has an interest in the property subject to the lien claim; An association representing owners organized under any statute or to which the Common Interest Community Association Act applies; or Any person who may be liable for the payment of the lien claim, including an owner, former owner, association representing owners organized under any statute or to which the Common Interest Community Association Act applies, or the contractor or subcontractor. Process for Filing a Petition To effectively substitute the bond for the real property, the applicant must file a petition with the clerk of the circuit court in the county where the property subject to the underlying lien claim is located. The petition must include the following: The name and address of the applicant and the applicant's attorney, if any; The name and address of the lien claimant; If there is a pending action to enforce the claim, the name of the attorney of record, or if there is no pending claim, but the claim has been recorded, the name of the preparer of the lien claim; The name and address of the owner of record of any real estate subject to the claim or the name and address of the homeowners association or the condominium association; A legal description of the property; A copy of the lien claim; A copy of the proposed eligible surety bond; A certified copy of the surety's certificate of authority from the Department of Insurance or the state agency charged with the duty to issue the certificate; and An undertaking by the applicant to replace the bond with another eligible surety bond in the event that the proposed eligible surety bond ceases to be an eligible bond. After filing a proper petition, the applicant must provide notice and a copy of the petition, either by personal service or certified mail, to every party whose name and address is stated in the petition and the lien party's attorney of record. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise business owners in the Chicago area.

On the Move: Legal Issues Affecting Motor Vehicle Manufacturer and Dealer Law

By Lou Chronowski • November 10, 2021
“Pandemic Impact? - New York Federal Court Allows Termination Dispute to Proceed” 

On the Move: The Future is Now!

By Lou Chronowski • October 19, 2021
Welcome to GHU’s newest blog – On the Move: The Future is Now! This blog focuses on legal and policy issues facing the vehicle industry. The future is now for the vehicle industry. Some states (CA and MA) have issued mandates requiring that vehicle manufacturers stop selling new ICE (internal combustion engine) vehicles by 2035. Most legacy vehicle manufacturers have made various announcements stating that their respective product portfolios will move from ICE to zero emission vehicles (EVs) over the next 10-14 years. Another significant issue facing the issue relates to how vehicles are purchased. Over the past several years, Tesla has charted a distribution model that rejects traditional dealerships and uses direct sales and service. Other EV manufacturers like Rivian and Lucid appear to be headed in a similar direction. It is well known that Apple and Amazon have plans to enter the vehicle space as well. Consumers will have a large role in determining how they want to purchase vehicles and vehicle services (much the same as they did with respect to on-demand transportation with the likes of Uber and Lyft). The question is whether traditional manufacturers will be kept on an uneven playing field with these newer market entrants. Finally, autonomous vehicles (AVs) are right around the corner as well. In addition to consumer adoption and acceptance of EVs, it is still unknown how consumers will react to AVs and whether AVs have a large role in America. The future is now. The changes in the industry are happening now and happening at fast pace. This blog will continue to explore issues facing the vehicle industry. For 20 years, Lou Chronowski has represented motor vehicle manufacturers helping them navigate complex laws and regulations and litigating disputes against dealers. If you have any questions, please contact Lou at lchronowski@ghulaw.com .
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