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SAN DIEGO — Some businesses in southeast San Diego continue to recover from last week’s devastating flooding. Viewers asked CBS 8 if they still have to pay rent while the doors are closed.
CBS 8 visited Motor Car Service, an auto repair shop in Logan Heights last Monday where floodwaters reached shoulder height. The store suffered $500,000 in damage. More than 25 cars were submerged in water.
“All of our customers’ cars were flooded and damaged. It’s devastating,” shop owner Richard Luarca said.
Luarca opened his store more than 20 years ago. He said they are currently working to remove debris and most of the cars are totaled.
Car engines, parts, power tools and documents all fell victim to the flood. Oil spilled everywhere and hazardous materials were called. The store is no longer open for business and has been temporarily closed.
“We’re losing. Nobody’s making money, we’re just losing,” Luarca said.
“It’s really heartbreaking and makes me want to cry,” said Arturo Lopez, an employee at the store.
They asked whether landlords could still collect rent if they closed their business due to a natural disaster such as a flood.
“Residential leases and commercial leases are treated very differently,” said John Heilman, a professor at Southwestern Law School.
He explained how they are different.
“In commercial leases, the obligation to pay rent will generally continue unless the lease agreement specifies otherwise,” he said.
Heilman said landlords with residential leases for apartments must maintain habitable space and must provide alternative housing to continue to collect rent from evicted tenants.
Commercial leases for businesses do not work in the same way.
“The law will be more liberal and allow parties to negotiate terms in the case of commercial leases,” he said.
He frequently says businesses need to keep paying rent. To better protect themselves, he recommends that businesses purchase business interruption insurance. This helps cover costs when your business is unable to operate due to unforeseen circumstances such as flooding.
The San Diego Black Chamber of Commerce is accepting grant applications to support businesses in southeast San Diego.
Watch related: A Stockton business owner on a mission to recover from flooding.
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