admin by David VS Wayblaze | 15 Apr 2020
Topics:
Local Business

Ask your landlord to temporarily defer your rent

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One of the most challenging expenses for small businesses that were forced to close their doors is to cover their monthly rent payment.  While they can layoff staff and cut back on supply purchases, rent is a true fixed cost.   Therefore, it is important to contact the landlord and try to negotiate a temporary deferral (or at least reduction) of rent payments until it is able to bring its revenues back up to more than 80% of normal levels or until the business is able to access government relief funds.

Landlords would much rather provide some temporary rent concessions than face the bigger issue of trying to collect rent owed if the business fails.   Landlords will hopefully be receptive to one of the following repayment proposals:

  • Repayment of the deferred rent amount in instalments over a 6 to 12 month period once the business resumes (ideally without any interest charge)
  • Adding the deferred rent at the end of the lease (e.g. if the landlord agreed to 3 months of deferred rent, that when the tenant finally moves out, they would agree to continue paying rent for 3 months).
  • Assigning ownership of some improvements that the tenant paid for on the condition that they be left behind after the tenant moves out (e.g.  if the tenant installed some furniture or special lighting that the landlord would be willing to buy, the ownership of that equipment could simply be transferred to the landlord and that would settle the debt).

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