Rent Relief PrimerTips for tenants regarding rent relief on your lease during COVID-19 shutdowns.
COVID19- and Rent Relief
Before we get started on some tips and information regarding rent relief, understand this is not legal advice. For legal advice regarding your lease, please contact a commercial real estate attorney. As everyone knows we are in the midst of shutdowns until April 13th in Austin **NOW EXTENDED TILL MAY 1st**. For now, that is all we know. Could it go longer? Yes, possibly and what if it does? What are your options as tenants?
Keep in mind a lease is a relationship. This relationship is between you and your landlord.
Perceptions and Rent Relief
There are 2 distinct perceptions in any lease. One is yours as a tenant the others is the landlords. Let’s go thru each of these so we are clear on expectations.
- Want Cash flow
- If you are a good tenant, meaning you pay on time they prefer not to lose you
- If a good tenant leaves their space, who is there to relet it quickly?
- Prefer a detailed explanation on your pain and what is going on?
- They typically do not want to evict you unless you are not a good tenant.
- Want their business to continue
- Require some type of help if their business disappears due to the COVID-19 situation
- Would be happier with a modification rather than a default on their lease
When your rental relief is approved, do not go back to the Landlord and ask for more. Take your time and be smart up front. A Landlord may ask for your financials if there is not alot of good history. Have financials prepared to be delivered if asked for them.
If you are a “Retail” type of business – you can consider percentage rent. This can be a temporary situation to kick back to your original rent schedule.
Contact your landlord “early” not later
- Prepare a detailed letter of what your situation is
- Parking? If you have an office space, are you using all of the parking?
- Security deposit- can they use this towards your next month’s rent?
- If your security deposit is used, you will have to replenish it- when?
- Ask for rent reduction(s)- detail for how long and how much?
- You should expect to “pay back” what you have been granted
- Don’t set yourself up for going to the “well” too many times
- Don’t expect your insurance to cover this type of event for you.
- A Lease modification should be one page
- If your lease is expiring soon (3-6 mos), contact Shire Commercial for renewal options now.