Law Firms

Fighting landlord's suit, Jenner & Block says COVID-19 pandemic entitles it to rent abatement

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Jenner & Block says abatement provisions in its Chicago lease cover situations like the COVID-19 pandemic, and it is entitled to an $840,000-plus credit for overpayment.

The law firm made the assertion in a June 22 answer and counterclaim to a lawsuit filed by its landlord that seeks more than $3.7 million in unpaid rent, report the American Lawyer and Law360.

The landlord, Hart 353 North Clark, says Jenner & Block didn’t pay rent for April or May.

Jenner & Block says it has a skeleton crew averaging 12 people at the office, leaving at least 89% of its space unoccupied since March 16. The law firm says it paid full rent in March, entitling it to a credit of nearly $700,000 for the space that it wasn’t using.

The firm also says it is entitled to credits for overpaid operating expenses and property taxes in 2019 and for some reimbursable expenses in 2017, bringing the total credit owed to more than $840,000 after deducting the lower, abated rent that Jenner was required to pay.

The law firm points to “hard-negotiated rent abatement provisions” that require the landlord to reduce Jenner & Block’s rent in the event of “untenantability” that arises “out of any event (force majeure or otherwise).” The provision applies when Jenner “is unable to and does not utilize all, or a portion consisting of at least 20% of the premises.”

The lease defines “untenantability” as occurring when “the premises, or any portion thereof, cannot be accessed or used and occupied as intended by tenant in the normal course of tenant’s business as reasonably determined by tenant and in compliance with applicable laws and is in fact not being used by tenant for the conduct of its business.”

Randy Mehrberg, co-managing partner at Jenner & Block, told the American Lawyer that the firm is in a strong financial position, and the dispute is solely about enforcement of the lease provision.

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