New Seattle law could prevent small restaurant owners from losing their homes during coronavirus

Seattle landlords cannot seize personal property if business owner defaults on commercial lease

Newly passed legislation in Seattle could help prevent small restaurant owners from losing their homes and personal assets as businesses continue to struggle from lost revenue during the coronavirus pandemic.

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Seattle city council this week passed a law that would prohibit landlords from seizing personal property if a small business of 50 or fewer employees defaults on a commercial lease, Eater Seattle reported.

 An employee serves food to a customer outside the Canlis restaurant on March 16, 2020, in Seattle, Washington. (Karen Ducey/Getty Images)

The law, sponsored by Seattle council member Andrew Lewis, will be in effect throughout the current state of emergency and remain the following six months after to help small restaurants, many of which are family-owned.

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"Our struggling small restauranteurs have enough on their plate without needing to worry about losing their home and life savings. This important policy provides that peace of mind," Lewis tweeted Thursday.

Small restaurant owners often rely on the business as their sole form of income, and with dining room capacity caps coupled with sluggish revenue from shutdowns in March and April, many businesses may find themselves unwilling to close but unable to pay rent, industry advocates say.

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“Nobody wants to close their business, but if they have no other choice they shouldn’t have to declare personal bankruptcy due to COVID-19,” Jeanie Chunn, group director of Seattle Restaurants United, a local coalition that lobbied for the legislation, told Eater. “They shouldn’t lose their home because they had to shutter their business for the sake of public health.”

The new law was put in place as a last resort for businesses that find themselves forced to default on a lease, however, restaurant owners say the real problem is the need for extended rent relief.

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To help give restaurants a lifeline, Seattle Mayor Jenny Durkan announced the expansion of free street closure permit options for businesses to expand outdoor dining for one or more blocks. Applications will be available July 29, according to the Seattle Restaurant Alliance. 

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A staggering 72,842 businesses are permanently shut down as a result of the coronavirus pandemic, an increase of 15,742 permanent closures since June 15, according to data from the business review website Yelp. Now, permanent closures account for 55 percent of all closed businesses since March 1, a 14 percent increase since June when Yelp reported 41 percent of temporary closures became permanent.

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