How do I approach negotiating with the property owner?

There are many approaches to starting the conversation, including:

1) Explain to the property owner the hardships that your business has suffered due to the pandemic; for example, whether you’ve shut down entirely or reduce service. One of the property owner’s first questions may be if you have applied for assistance under the CARES Act. Be ready to tell the property owner if you have, or why you have not;

2) Acknowledge that this is an unprecedented situation and that you would like to collaborate with the property owner to find a solution;

3) Propose terms that you would be willing to accept;

4) Ask the property owner for confirmation that the property owner won’t issue any default notices (for nonpayment of rent or otherwise) during the period of the pandemic restrictions.

If you are thinking of telling the property owner that you won’t pay any rent, you may want to talk with an attorney first. Do not send a letter like the Cheesecake Factory, telling all of its property owners, including malls, that it would not pay rent in April. Cheesecake Factory is now likely facing lawsuits. Similarly, the property owner may take this as advance notice that you plan to breach the lease. Some leases provide that a threat to breach the lease puts the tenant in default. If your lease has this type of provision, the property owner may decide that your notice that you won’t pay any rent puts you in default. The property owner may then be able to exercise its remedies under the lease.

If you specifically cannot pay all or part of your rent because of Covid-19, instead call your landlord and follow the directions above about Governor Brown’s “no evictions” order for non-residential leases. In addition, you may send a letter with the same information, following the notice requirements in your lease. However, don’t just say you won’t pay rent; provide the required documentation and negotiate to make partial payments if you are able.

(Source: owners-lease-covid-19-coronavirus)

Show All Answers

1. What should I do if I can’t pay the rent for my small business?
2. Can the federal CARES Act help me pay my rent?
3. Does Oregon’s “no evictions” order apply to commercial leases?
4. Can I negotiate a change to my lease?
5. Why would the property owner be willing to negotiate changes to my lease?
6. How do I approach negotiating with the property owner?
7. What are some terms that I can consider offering the property owner?
8. If I am able to reach an agreement with the property owner, can we just agree over the phone?
9. I can’t pay rent and can’t reach the property owner. Should I send them a letter explaining? Is that enough to forestall an eviction in the future?
10. What if I already missed a rent payment and the property owner sent me a default notice?
11. Am I still responsible for paying rent if I have to close my business?
12. Will a “Force Majeure” or “Impossibility” clause get me out of the lease?
13. What if my lease states that I have to be open during certain days and hours?
14. What if the property owner wants to cancel my lease because the location is good and they think they can get more money from another tenant?
15. What if I have to declare bankruptcy?
16. If I am a month-to-month tenant, how does this impact my lease?
17. I do not know if I have a lease (or can't find a copy of my lease). What should my next steps be?
18. Where can I find more resources?