Learn how to keep your space, and pay for it too.

It is critical to maintain a working relationship with your landlord, so that your landlord is comfortable with your ability to pay rent and maintain the property that you lease. The following steps can be taken to help you through these difficult times and dealing with your landlord.

It is imperative to prepare projections for your business which provide you with a best, middle, and worst-case scenario of what can happen with your business. Revising your business plan will help you prepare a roadmap as to how to save your business and can help you establish a baseline for negotiation with your landlord.

The lease agreement governs the rights and responsibilities that you and your landlord have with respect to the property you are using. In addition to terms of payment, a lease also contains language concerning your and your landlord’s obligations to maintain the property. After reviewing your lease could reveal that (a) there are things that your landlord has not done, but is required to do; and (b) there are services that you can provide or assist with that will justify reducing your rent. The lease agreement may also contain other provisions such as those that govern early termination, what happens if your business is unable to operate, and penalties for failing to comply with the lease.

Some leases may contain a force majeure provision, which will excuse payment of rent when acts of god, such as the Coronavirus, prevents you from using the leased premises, but those provisions may limit your right to payment. In addition, under the doctrine of frustration of purpose, a tenant may be excused from payment, but only if the entire purpose of a lease makes it impossible to perform. As a result, and while payment may be excused while your business is closed, the Coronavirus closures will not get you out of your lease.

After revising your business plan and reviewing your lease agreement, you should approach your landlord with your business plan (subject to appropriate non-disclosure agreements), and discuss what services you can provide or that the landlord has not provided, to secure a reduction in rent. If, after reducing costs, you are uncertain...

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