The COVID-19 pandemic has negatively impacted the economy and created uncertainty for businesses in various industries. In light of the current situation, companies are looking to obtain some financial relief, with rent among the major concerns they are seeking to resolve.
Below are a few tips on how to best approach and present your case, so you can achieve some rent relief while also maintaining your relationship with your landlord.
- Be empathetic. Current circumstances have created a difficult situation for you. Understand that your landlord is also under a lot of pressure, both on the financial and operational front. When making your request for rent relief, put yourself in your landlord’s shoes and understand where he or she is also trying to make ends meet amidst this crisis; this approach can help both of you objectively assess the situation and hopefully come to an agreement that works for both parties.
- Thoughtfully prepare your case. Assure your landlord you are a good risk and a desirable tenant by being honest about your financials and current standing. Ensure all your books are up to date – doing so paints an accurate picture of your present situation and expedites the process with your landlord. Be upfront about how your business was performing prior to the crisis, as well as your other financial obligations. Your landlord is looking for assurance that while you need rent relief now, you will be able to fulfill future rent obligations.
- Demonstrate that you’re also taking action to alleviate the situation and rent relief is not the only option you’re exploring. Discuss the other costs you are cutting (reduced operating hours and overhead, for example) and whether you are in talks with other parties (suppliers, vendors, etc.) about minimizing expenses. Showing that you are proactively finding various means to solve your financial challenge and making sacrifices raises your credibility, strengthens your case and lets the landlord know you are not asking for an “easy fix”.
- Know and document the considerations you are willing to offer. With you getting rent relief for a set period of time, you will likely need to either increase future rent, extend your current lease term or a combination of the two. Let your landlord know what other terms in the agreement you are ready and willing to move on, and when. Meeting your landlord partway and making it as easy as possible for them to process your request quickly will go a long way in getting the break you are asking for. Remember Top Tip #1: Your landlord is currently trying to process an unprecedented number of requests.
- Get help. With so many tenants and landlords leaning on lawyers for advice, many lawyers are finding themselves conflicted and or overwhelmed. Securing representation might take a little time, so we recommend that tenants get ahead of this aspect. It is also a good idea to seek the help of an accountant to go over your lease terms, both current and future. As well, partner with a trusted advisor from a trusted company that has good relationships with landlords. An effective advisor can help present your case in a way that can one, help get your case on the top of the landlord’s list and two, improve your probability of having a successful negotiation resulting in rent relief.