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
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