The dramatic increase in COVID-19 vaccinations cannot mask the fact that many small and mid-sized businesses are still struggling. Even if your business has started making money again, you might be behind on plenty of expenses. Paying your commercial landlord might be one thing you’re worried about.
There are no more rent deferrals or eviction moratoriums imposed by the state or federal government. At this point, you must carefully evaluate your options and see how you can satisfy your commercial lease obligations. The first step here is to comb through your rental agreement for any indications that you can continue to defer payments. Your lease might include a “force majeure” provision that excuses you from certain obligations in extreme circumstances, but that might not apply to financial hardships caused by COVID-19.
Sit Down With Your Landlord
If you and your lawyer don’t see a clear way out through your lease, it’s probably time to speak with your landlord. Don’t wait forever to speak with him or her, though. Even though you might have a good relationship with your landlord, you shouldn’t assume anything. Your landlord is under no obligation to cut you a break, and it’s better to find out that there’s no wiggle room in your rental agreement sooner rather than later.
What Can You Do?
There’s no telling what your landlord will be open to doing. Instead of asking your landlord to come up with creative solutions to your quandary, it might be better for you to propose fixes yourself. Here are some ways you could make it work:
- Offer to agree to extend the lease.
- Come up with a payment plan, possibly including a fresh deferment period.
- Surrender your security deposit and/or offer to buy out your lease over a period of time in exchange for signing a new lease.
- Paying what you can until you can begin paying in full.
- Subletting a portion of your space.
Remember: your landlord needs you almost as much as you need your landlord. Without your rent payments, your landlord has to go through the legal process of eviction and find a new tenant, which can be quite difficult for many commercial landlords these days. If you think that your proposed solution will end up making better financial sense for everyone, you should articulate that concisely.
Conclusion
Forgetting about your company’s unpaid rent or continuing to kick the can down the road is not the best way to deal with your commercial lease. Proactive discussions with your landlord can be productive, but it’s still good to have a knowledgeable attorney to help negotiate and protect your rights. Bryant Taylor Law would be happy to provide you with strategic legal representation; contact our firm today to schedule a business strategy session.
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