As malls and shopping centers re-open, a second default scenario looms behind the tenant’s failure to pay rent: its failure to “continuously operate” as required in many store leases. Just as JC Penney is fighting to keep Sephora’s store-in-store concept operating (see linked article), landlords can be expected to likewise enforce their rights to prevent the domino effect of impermissible store closings by some tenants triggering the go-dark rights of still more tenants. Courts around the country are divided on the enforcement of continuous operations provisions in leases; this will get interesting.
