How can you defer or reduce rent during unforeseen events?

1 Assess your situation

Before you approach your landlord, you need to have a clear understanding of your current and projected financial situation. How much rent can you afford to pay? How long do you expect the hardship to last? What are your alternatives if you cannot reach an agreement? You also need to review your lease terms and identify any clauses that may affect your rights and obligations, such as force majeure, rent abatement, or termination options. Having this information will help you prepare a realistic and reasonable proposal for your landlord.

2 Communicate with your landlord

The next step is to communicate with your landlord as soon as possible and explain your situation. Be honest, respectful, and proactive, and show that you are willing to work together to find a solution. Provide evidence of your financial hardship, such as bank statements, sales reports, or tax returns, and explain how the unforeseen event has affected your business. Avoid making demands or threats, and instead, focus on finding common ground and mutual interests.

3 Negotiate a rent deferral or reduction

One of the most common ways to defer or reduce your rent during unforeseen events is to negotiate a rent deferral or reduction with your landlord. This means that you agree to pay a lower amount of rent or postpone some or all of your rent payments for a certain period of time, in exchange for some concessions from your side. For example, you may agree to extend your lease term, waive some of your rights, or pay interest on the deferred rent. The terms of the rent deferral or reduction should be clearly documented in a written amendment to your lease, signed by both parties.

4 Explore other options

If you cannot negotiate a rent deferral or reduction with your landlord, you may need to explore other options. These could include subleasing or assigning your space to another tenant, applying for government relief programs or grants, invoking the force majeure clause in your lease if applicable, and negotiating an early termination of your lease if you cannot continue operating your business. Each of these options could help you defer or reduce your rent obligations.

5 Seek professional advice

Defering or reducing your rent during unforeseen events can be a complex and challenging process, and it may have legal, financial, and operational implications for your business. Therefore, it is advisable to seek professional advice from a commercial real estate broker, lawyer, accountant, or consultant who can help you understand your options, protect your interests, and negotiate the best deal possible with your landlord.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?