Can You Renegotiate Your Commercial Lease?
Nobody should be kicked out of their storefronts in the midst of a public health crisis. During these unprecedented times, it’s important to find every way to cut down on expenses and still keep your gym, restaurant, salon, or other commercial space. Thankfully, local governments have recognized this and issued moratoriums to halt evictions. With rent being one of the biggest expenses for business owners, now is the time to renegotiate your lease to help keep your business afloat.
In places like San Diego, county officials have approved a resolution that creates a moratorium on “all evictions of residential and commercial renters in the unincorporated areas who have seen their income reduced or been otherwise substantially economically harmed by the COVID-19 pandemic.” The moratorium will last through May 31. Los Angeles county announced their moratorium on evictions also lasting to May 31 and in the city of LA, tenants have 12 months after the moratorium is lifted to pay back rent. Several Orange County cities have also approved their own moratorium for both residential and commercial tenants.
When should I renegotiate?
The short answer? Now is the time. With the law on halting evictions in place for Southern California businesses, legal counsel will ease the negotiation process in a way that is mutually beneficial to you, your lender, and your landlord. Business struggles, market changes, or impending lease expiry are typical situations in which business owners seek to adjust their lease terms. The pandemic hits all of these factors and it would be wise to renegotiate before you are even further behind on payments.
Does renegotiating mean I don’t have to pay rent?
During this time you must be able to provide documentation of financial hardship due to COVID-19, and tenants are not exempt from payment. Different counties will have payback options once the moratoriums are lifted for missed payments. At the end of the 60-day moratorium (which may or may not be broadened), you are still at risk of eviction. Preparing to modify your lease terms now could impact your repayment as you and business recover.
We want to help protect your business.
At Hoffman & Forde, our lease negotiation attorneys are experts at real estate law and policies. Negotiation is an art and we have mastered it, yielding fruitful results for our clients. Our commercial loan modification program has helped our clients keep their properties and meet the cost of operations in the past, and we can do so even now. Leave the tedious, exhausting and potentially confusing commercial real estate negotiations to us and put your mind at ease.
We’ll put together a solid game plan to make sure you get a fair negotiation that will impact your business not just now, but also beyond the pandemic. Call us today to see how we can help.