Working out a payment plan with your landlord
Tenants can seek advice or professionals like lawyers on how to go about rental payment problems and available payment plan possibilities.
You can work out your payment plan with your landlord by renegotiating your leases. Other reasonable landlords may accept this instead of losing out on the rent altogether. It is a win-win situation as your business is also not faring well during the crisis.
Tenants could ask the landlord for monthly rental payments instead of quarterly; for a moratorium on rental payments or 3-6 months; for a reduction in rent, for rent to be permanently or temporarily converted to a turnover-only basis; or that the rent is reduced by 50% to share the pain equally.
The landlord and tenant can strike out a plan to benefit each other by promoting each other’s cause. For example, a landlord can commit to use the products of his/her tenants or direct his customers to the tenant’s business. This helps the tenant not to go out of business. When the business booms, the landlord has his rent in time as arranged.
Landlords can also engage in regular rent reviews with short intervals with the business tenant in order to adjust rental fees with respect to the tenant’s financial situation.
Other rental payment plans may be paid by installments or granting rent-free periods.
Tenants and landlords should work out their payment plans having in mind that rent is one of the major operating costs for retailers, and at the same time, rent is the primary source of income for many landlords.
Force majeure clauses allowing termination, or at least closure, and providing for the cessation of rents should be included in all leases for business premises.