Category Archives: Landlord/Tenant

The Impact of COVID-19 on Commercial Real Estate

The Coronavirus and the State of Emergency

On March 10, 2020, the Michigan Department of Health and Human Services identified the first two presumptive cases of coronavirus, also known as COVID-19, in the State of Michigan. On March 16, 2020 Governor Whitmer signed Executive Order 2020-9 which closed restaurants, bars, cigar lounges, movie theaters, casinos, libraries, and gyms from the public. On March 23, 2020, Governor Whitmer signed Executive Order 2020-21 which imposed a temporary stay-at-home order for non-essential matters, which was later extended and expanded through Executive Orders 2020-42, 2020-59, 2020-70, 2020-77, and 2020-92, and is currently in effect for the majority of the State through at least May 28, 2020.

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Business Interruption and Loss of Use Insurance Claims Resulting from COVID-19

In Michigan, as in most states, the state authority has significantly limited access to public places, stores, restaurants, movie theaters, offices, and other businesses through the issuance of executive orders prohibiting such access. For businesses whose viability depends on the public’s ability to access that business’ physical location, the issuance of such orders has resulted in a loss of use of the property and a severe interruption in business. For some, their insurance policies may appear to insure against loss of use of the insured property when a civil authority prohibits the insured from using the insured property, such as through issuance of an executive prohibiting such access, or there is damage to the property resulting in its loss of use. While it may seem as though the business climate created by the Coronavirus (COVID-19) is unique to our generation, this is not the first time a Governor’s executive order has impacted businesses in Michigan and there are several cases from the Michigan Court of Appeals which can provide guidance.

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Landlord Tenant Issues in the Time of COVID-19

The novel coronavirus disease (“COVID-19”) has impacted nearly every aspect of life, including residential housing. People living in communal living spaces and apartment buildings need to take particular care to prevent and address community spread. Landlords and tenants alike may be affected by economic uncertainty and strain due to the pandemic. In is therefore crucial that landlords and tenants prepare to respond to the unique issues raised by the spread of COVID-19. This article will highlight some of those concerns and give insight into how landlords and tenants may tackle them.

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Kevin Hirzel’s interview on Law and Crime Network, Covid-19 Law Q&A

Law & Crime Network recently interviewed Kevin Hirzel regarding national issues that are arising due to the Covid-19 crisis . In this Q & A, Kevin Hirzel addresses rent and mortgage concerns, loan modifications, State Executive Orders and Federal stimulus efforts. Viewers from around the nation have questions and concerns about this pandemic and want to know what rights they have. Covid-19 is causing housing concerns across the nation and Kevin Hirzel provides advice on how to navigate this national crisis.  The interview can he found here.

Kevin Hirzel is the Managing Member of Hirzel Law, PLC and concentrates his practice on commercial litigation, community association law, condominium law, Fair Housing Act compliance, homeowners association and real estate law. Mr. Hirzel is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country. He has been a Michigan Super Lawyer’s Rising Star in Real Estate Law from 2013-2019, an award given to only 2.5% of the attorneys in Michigan each year. Mr. Hirzel has been named a Leading Lawyer in Condominium & HOA law by Leading Lawyers Magazine in 2018 and 2019, an award given to less than 5% of the attorneys in Michigan each year. He represents community associations, condominium associations, cooperatives, homeowners associations, property owners and property managers throughout Michigan. He may be reached at (248) 478-1800 or kevin@hirzellaw.com.

MICHIGAN COURT OF APPEALS RULES IN FAVOR OF TOWNSHIP IN ZONING ORDINANCE DISPUTE OVER SHORT-TERM RENTALS

BACKGROUND

On October 25, 2018, the Michigan Court of Appeals issued an unpublished opinion in the matter of Concerned Property Owners of Garfield Township, Inc v Charter Township of Garfield, unpublished per curiam opinion of the Court of Appeals, issued October 25, 2018 (Docket No. 342831). The Garfield case involved the interpretation of a zoning ordinance that addressed short-term rentals of residential properties in certain districts. In Garfield, a number of homeowners frequently rented out their homes for short-term intervals, usually for about one week in duration. In September 2013, the Garfield Township Zoning Administrator expressed an opinion that the zoning ordinance then in effect, called “Ordinance 10”, permitted short-term rentals.

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What is a Personal Guaranty and Why is It Important with a Commercial Lease?

Introduction

At some point in their lives, most adults have signed a lease agreement, whether it be the leasing of an automobile, an apartment on campus while attending college or renting a home. Since most of these leases are standard forms offered on a “take it or leave it” basis by the lessor or landlord, negotiating the base rent and term of the lease is typically the main and only focus for the lessee.

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House Bill 4463: Proposed Law Would Allow LLC’s to Pursue Landlord/Tenant Evictions without an Attorney

On March 30, 2017, Representatives VanSingel, Lucido, Sheppard, Webber, Howrylak and
Calley proposed House Bill 4463, which would amend MCL 600.101, et seq. by including a new section 5707.  Under current Michigan law, a limited liability company (“LLC”) is required to be represented by an attorney for any landlord/tenant matters.  The proposed law would allow single member LLCs (or two member LLCs if the two members are married) to handle evictions without requiring an attorney under certain circumstances.

First, the amount in dispute could not exceed the limit for small claims matters [currently $5,500].  Thus, if the damages exceeded $5,500 then an attorney would still be required.  Second, the LLC may only be represented by a member, a property manager or other agent with direct and personal knowledge of the facts in the complaint.

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Are Tenants Required to Strictly Adhere to “Option to Renew” Language in a Lease?

At the beginning of any landlord/tenant relationship, it is common for a landlord and tenant to execute a Lease Agreement with a defined initial lease term. In most leases (particularly commercial leases), there is also a provision that allows for an additional extension or extensions of the lease term, commonly called an “Option to Renew” provision. Historically, Michigan courts have required tenants to strictly comply with all of the requirements of the Option to Renew in order for the extension of the lease to be valid. Recently, Michigan courts have taken a less stringent approach under appropriate circumstances and looked more toward the behavior, actions or conduct of the landlord and tenant to ascertain whether an Option to Renew was properly exercised. This article gives an example of an Option to Renew provision, discusses the historical approach compelling strict compliance with an Option to Renew and discusses recent cases that hold strict compliance for an Option to Renew is no longer required in appropriate cases. Read more