Strategic Advisory Coronavirus Q&A: What are my options for tenants asking for payment relief?
Question: I'm a landlord and my customers (or tenants) are asking for payment relief. I want to support them and keep them long-term, but we don’t have enough cash to fund all the requests. What are my options?
Strategic Advisory Team Answer: You have many tools available, the value and impact of those will vary based on your situation, the particular tenant, and their lease terms. Before responding or acting on any of the following, make sure you know where you are today and the impact of the relief you’re considering. Here are some thoughts
Make sure you understand your tenant’s financial situation today. It is appropriate to ask to see financial information.
Get something in return, for instance depending on the tenant you might ask them to add a month to the term of their lease for every month of relief provided plus repayment or require them to make up the discounted amount within your fiscal year
Modify the terms of their contract to provide you with more protection of eventual payment, e.g. a personal guaranty or a loan document
DISCLAIMER – Due to the daily changing environment and guidelines being provided by the government, this information could be outdated. Please contact our office for the latest updates and guidelines. Optima Office is not responsible for any actions taken due to the information provided. The information provided here is for instructional purposes and does not represent legal advice being given by Optima Office.
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