With the recent outbreak, it is getting harder for corporate clients to perform their business operations within their office spaces. For those who have recorded a lower inflow of revenue, they may be struggling to pay their rents. This article gives you the guidance you need to effectively negotiate your rent relief.
1. Check Your Lease
Some lease documents contain clauses that allow you to suspend rent obligations during an emergency, a crisis or an unfavorable government policy. If you have a clause like this, you can activate it to negotiate relief. It is essential to know that your legal options are limited by what is written in the lease.
2. Talk To Your Landlord
If there are no provisions within your lease that allows you to suspend your rent obligations in case of an emergency, you may want to pick the phone and talk to your landlord. Landlords are, especially in this period, open to learning more on how they can partner with their corporate tenants in such a way that all parties win and there are fewer hassles.
3. Prepare Your Items
If you are going to talk to your landlord, you need to prepare before seeking rent relief.
Here are a few items that you may want to prepare:
Your business plan gives unique insights into how the remainder of your business will go for the remainder of the year and the upcoming ones. Ideally, the plan will detail how you will restore profitability as well as cash flow projections.
Financial statements help the landlord to see the financial viability of your business. These statements could include financial statements for any guarantors or parent companies. If you are going to work with our landlord, they have to see your fiscal position, so they can see how you can recover after the crisis.
Aside from the base rent, you need to give the landlord the options to show how you intend to reduce the operating expenses. Here is a list of items a landlord could request:
Number of layoffs and impact of those salaries
Any business lines cut or reduced due to the pandemic
Any services no longer offered
Any reduced operating hours (company-wide or number of employees)
Source For Local Funding
If you have a small business, there are several fundings available at the city and state level . Chicago launched $100 million, and Philadelphia created a $60 million fund for small businesses.
The world is going through an uncertain time right now, and business owners are losing out on a huge chunk of the revenue. The best option is to minimize expenses. If you follow through with the tips highlighted above, you will be able to approach your landlord with confidence and negotiate rent relief.
Once you are able to compile all these documents, you will want to work with a tenant rep to help to identify the specifics of what you need before you approach your landlord.