Many businesses have been affected as a result of the coronavirus pandemic. To mitigate business expenses, many corporate tenants have been wondering exactly how to renegotiate their rents. In this article, we are going to explore ways to renegotiate rent after the pandemic.
1. Know Your Landlord
Understanding your landlord is the first step to take when trying to renegotiate rent after the pandemic. The form of communication will depend on how large the building management is. For instance, if you are negotiating with a landlord that owns a lot of properties, the best way to initiate communication communications with your lease agreement may be via email.
2. Have all your Documents on Hand
To effectively renegotiate your rent, you have to be able to convince your landlord that you are a trustworthy and responsible tenant who deserves a lower rental agreement due to the pandemic. Having all the documents show that you are prepared and are worthy of renegotiated terms.
Some of the information you may need include: past rental history, credit score, and other important financial information that will make the process of negotiating stress-free.
3. Look Up Comparable Listings
To be able to renegotiate a reasonable rent rate, you need to have an idea of how much other comparable commercial office buildings are adjusting to the current economic climate. This information can be obtained via an online search, and compare prices for similar rentals in the area.
4. Review Your Rent Structure
You can ask your landlord to switch to a month-to-month payment plan. This is especially good if your lease is up for renewal as it offers more flexibility. Before the pandemic, short term leases were usually expensive and many tenants did not consider them. However, as many landlords risk losing out on revenue, they are more likely to review their rent structures in order to make short term lease affordable.
5. Review Your Financial Situation
Before approaching your landlord about a potential review of the current rent structure, it is essential that you are realistic about how much rent you are able to afford.
For instance, if your business isn’t generating consistent revenue on a monthly basis, you may want to consider a reduction in the annual rent fee instead of seeking a month-to-month agreement basis.
Having an honest conversation about your financial situation with your landlord will put you in a good position to have a faster solution that all parties will find useful.
6. Make a Plan to Re-discuss Rent Payments Moving Forward
Since this renegotiation is a temporal fix, it is important that you set up a schedule to reconnect with your landlord at a later date to re-discuss rent payments.
If your landlord does agree to either waive payments or reduce them, it's important to keep communicating about expectations for when rent payments will return to normal.
This will help you address concerns like:
Will your landlord put you on a payment plan, later on, to make up for missed payments, or will a lump sum eventually be due?
When will the reduced rate no longer be in effect when the pandemic subsides or when you're able to find sustainable work?
What if you're unable to find work or receive unemployment by a certain date?
These are all important concerns that you may need to address with your landlord.
Here are a few other articles we think you'll enjoy:
Negotiating Your Commercial Lease 101
5 Commercial Site Selection Items to Know
10 Modern Features to Look For When Leasing Office Space
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