Council passes ordinance to temporarily halt personal-liability clauses in commercial leases.
The Seattle City Council has unanimously passed an ordinance proposed by councilmember Andrew Lewis to temporarily suspend personal guarantee clauses in commercial leases in Seattle during the coronavirus crisis.
Many restaurants have been impacted by the perfect storm of a pandemic shutdown, loss of business and long-term leases signed with a personal guarantee. The ordinance was passed with two amendments; one making the suspension of liability for a lease permanent for any business closing during the government-ordered shutdown, and the second extending that suspension for all other companies to six months after the emergency ends.
Councilmembers previously passed an ordinance that requires residential and commercial landlords to offer payment plans to tenants for six months after the end of the emergency.
In the discussion of the ordinance, it was noted Washington state law bars government from interfering with legal obligations in contracts, thus the ordinance could face a legal challenge. Council vote on the ordinance was unanimous. To see the text of the ordinance, click here.