In these unprecedent and difficult times, tenants unable to pay their rent has become an increasing challenge for landlords.
However, there are a number of options available to you to help find a mutual solution for both you and your tenant.
As a first step, we would recommend engaging with the tenant to understand what action they have undertaken so far to reduce their overheads and help their cashflow.
This might include seeking grants from the government, furloughing staff and engaging with other debtors.
A review of the lease terms should also be undertaken, to outline any immediate risks and security held, including rent deposits, guarantors and tenant break clauses.
Once completed, you will be able to establish the level of help that your tenant needs and can start to explore potential solutions.
The extent of support you are able to afford a tenant will be unique to their situation.
Typical solutions that can help to ensure your tenant remains in business, and that you are able to retain their occupancy, might include:
- Rent-free periods
- Rental deferment
- Altering payment frequency (quarterly, monthly or weekly).
The negotiations also provide an opportunity to re-gear the lease terms. You may consider altering the terms of the lease, which might include:
- Extending the length of the lease
- Removing your tenant’s break option
- Adding a break penalty to your tenant’s break option
- Inserting a landlord’s break option
If you would like to discuss your circumstances, our team of experienced property asset management experts will work with you to develop a solution that works for both you, and your tenant.
We understand that, in some cases, a resolution cannot be sought, and we are also able to assist in the event of a dispute.