Worried about your lease? Here are some suggestions on how to address the situation with your landlord.

Most business owners who lease space can’t afford to pay rent since they aren’t able to make money during this unprecedented situation.. The majority of landlords will expect to be paid. 

It is always best to be proactive and contact your landlord now rather than take a wait and see attitude. You will also separate yourself from the rest of the tenants by doing this and will treated with more respect than the tenants who didn’t reach out to the landlord in advance. The federal government may provide some relief for business owners on this but we won’t know for quite some time what will happen. 

Before you call your landlord do the following: 

• Look at your insurance policy to see if you have business interruption insurance. If so, call your insurance agent as they may cover the rent during this period. 
• Locate a copy of the executed lease

Check the lease for the following dates/information:

               Determine Lease Expiration Date (If you are on a month to month lease you can provide a written notice to the landlord to cancel the lease)

               If you took occupancy after the date noted in the lease you should have a commencement letter detailing the date the lease started. Now you can determine the expiration date

               Check the lease for an Early Termination option. If there is one in the lease, exercise your right by giving the appropriate written notice.

               Check the Tenant Default language, so you know what can the landlord do if you don’t pay rent.

               Check the section on Legal Fees. If tenants default who pays the legal fees? 

Next Steps:

• Call your landlord and be upfront with them about the lease situation. Your landlord may have made arrangements with his bank to pay the mortgage late. If so, he may be willing to extend you credit or set up alternative payment options. This is not a time to hide behind email.  
• If your lease has less than a year until it expires you could offer to extend the lease for a 3 or 5 year period in exchange for getting a month of free rent for every month you extend the lease. This will help the landlord by increasing the value of the building in the event he/she needs to refinance the building shortly. 
• If the landlord must have the rent ask him what will happen if you simply can’t pay? If he will proceed with an eviction contact an attorney right away to determine your rights. 
• Try and renegotiate the terms of the agreement over the short term. For example can you pay the common area operating fees during this time and then pay the unpaid rent at a future time? 

Once you get off the phone with the landlord, send them an email following up the terms you both agreed to. Keep in mind you are an asset to this landlord. They can’t pay the mortgage without your tenancy. If all the buildings emptied out then the landlord will lose the buildings to the bank. This is a time when we need to come up with solutions that work for the tenant and the landlords.