CRE glossary
Force majeure
A force majeure clause suspends contractual performance obligations during defined unforeseeable events outside either party's control: pandemics, natural disasters, war, government shutdowns, acts of terrorism. Force majeure was a sleeper clause until COVID-19; now it's heavily negotiated in every modern commercial lease.
Pre-2020 force majeure clauses typically excluded payment of rent, tenants had to keep paying even during a hurricane or war. Post-COVID, clauses have grown to specifically address pandemics, government shutdowns, and operational restrictions. Tenant-friendly drafting now includes rent abatement during defined force majeure events; landlord-friendly drafting limits force majeure to non-rent obligations.
Triggers must be precisely defined. Vague language ('events beyond reasonable control') gives both sides room to dispute. Modern clauses enumerate specific events: epidemics declared by WHO/CDC, military or civil unrest, fire, flood, earthquake, terrorist attacks, court orders, strikes affecting essential services, utility failures lasting more than 48 hours.
The cure mechanism varies. Common structures: (1) Mutual extension of the term, both parties pause obligations for the duration. (2) Rent abatement during operational restrictions, tenant pays reduced rent if forced to close. (3) Termination right after extended duration, tenant can terminate if force majeure persists more than 90–180 days. The third is the most tenant-favorable and the most contested.
Example
- Pre-2020 trigger language
- Acts of God, war, civil unrest
- Modern trigger language
- Above + pandemics, government orders, terrorism, utility failures > 48hrs
- Pre-2020 cure
- Performance suspension; rent still due
- Modern cure (tenant-friendly)
- Rent abated during operational restriction; termination right after 180 days
Broker perspective
Post-COVID, every tenant should negotiate force majeure carefully. Specifically: include pandemic and government-order language, include rent abatement during operational closure, and include a long-stop termination right after 90–180 days of restricted operations. Without these, the tenant is exposed to another COVID-shaped event with no recourse.
Frequently asked
People also ask
Is force majeure standard in every lease?
Yes, but the breadth varies enormously. Old leases have narrow triggers and exclude rent. Modern leases include pandemics and rent abatement.
Did COVID trigger force majeure in most leases?
Mostly no. Pre-2020 clauses typically didn't enumerate pandemics. Most COVID rent disputes were settled commercially rather than through force majeure litigation.
Can I renegotiate force majeure mid-term?
Only with landlord agreement. Most landlords resist post-execution amendments to force majeure. Get the language right at LOI.
Does force majeure cover utility outages?
Modern clauses do, with a duration threshold (typically 48–96 hours of total outage). Older clauses often don't.
Related terms
Default and cure period
When a tenant breaches the lease and the time the landlord must give them to fix it before pursuing remedies.
Letter of intent (LOI)
A non-binding outline of the major business terms, rent, term, TI, options, that becomes the basis for the binding lease.
Holdover
When the tenant stays past lease expiration without a new agreement, usually triggers a steep rent premium (150–200% of base rent).
Good guy guaranty
A limited personal guaranty that protects the landlord against unpaid rent only if the tenant doesn't surrender the space cleanly.
See force majeure extracted from a real lease.
Drop a 60-page lease, get a 38-field abstract in 90 seconds, every value cited back to the source page.