Eventually, the landlord may have to make a hard decision. "There's going to be a point where a landlord needs to make a business decision because they can provide the accommodations, reductions, deferrals, and it might not be enough to jump start this business," Solomon says. "Even if you gave them free rent, some are not going to make it."

To protect themselves, Solomon advises his landlord clients to draft forbearance agreements, which include bankruptcy specific provisions. "There are provisions in a forbearance agreement that protect the landlord in the event of a tenant's bankruptcy that would not otherwise be enforceable in the underlying lease," Solomon says.

When a bankruptcy case is filed, the automatic stay is triggered. "The automatic stay is a provision of the bankruptcy code, which prohibits the continuation or commencement of litigation," Solomon says. "The automatic stay is intended to give the debtor breathing room while attempting to reorganize. There are many lease agreements, which contain waivers of the automatic stay."

Solomon says these provisions are commonly not enforceable because they are considered against the public policy.

When landlords and tenants are working through defaults favorably, and outside of the court system, a forbearance or lease amendment after a workout, which contains a waiver of the automatic stay, is more likely to be enforced by the bankruptcy court, according to Solomon.

The landlord can use this leverage in negotiations. "The landlord can propose to work through a modification to the financial requirements of a lease, but in exchange require terms which will make a resolution more streamlined in the event the tenant subsequently defaults,'" Solomon says. "After giving a tenant the opportunity to work through this difficult time, the landlord does not want to end up in protracted litigation or thwarted by a bankruptcy."