Article

Why aren't landlord's nicer and giving free rent?

Provided by:  Jennifer Kirschenbaum, Esq.

September 22, 2020

 

Question:

Hi Jennifer & Jesse,

My landlord is telling me I still need to pay the rent for the 2 months our office was closed due to Covid.  Can I get your thoughts on this?
 

Thanks!
Dr. R


Answer:

Provided by: Jesse Kirschenbaum, Esq.

It's hard to understand from the tenant's perspective how "ruthless" landlords are being during Covid.  Why hasn't your landlord called and offered sympathy for the months closed and an offer to reduce or forgive rent?  Is he/she just a heartless person? Or, too "corporate" and removed to care?   Maybe.  But it is more likely that your landlord has his/her own obligations to meet, more specifically, likely to a lender who the Landlord has an obligation to pay each month, or risk losing the space completely.   It is also likely that any lease modification the Landlord agrees to may have a significant impact on their loan covenants (their deal with their own lender).  It is common for loan covenants to contain debt to income ratios or other conditions that require a certain amount of monthly revenue.  Some loan covenants contain vacancy rate or tenant delinquency rate covenants that limit the landlord’s ability to make concessions with their tenants.  Much like with landlords relationships with their tenants, landlords have been put in the position where they are also seeking relief from lenders.

Nevertheless, after the first couple months of Covid-19 I found most of the landlords I reached out to were open to short term lease modifications that would allow tenants to maintain operations and permit them to remain in compliance with their loan obligations.  Some landlord have been willing to defer rent and amortize the amount of rent deferred over the remainder of the lease term. Other landlords have agreed to defer rent and tack it on as extra days at the end of the lease term.   

The key to surviving this pandemic as a commercial tenant is seeking professional guidance and maintaining consistent communication with the landlord while working on a solution to making it through Covid-19 with their tenancy in tact.  We are here to help if you are looking for assistance seeking an accommodation or modification on rent.   

Jesse Kirschenbaum, Esq.
(Jennifer's cousin and Ken's nephew) is senior associate at K&K in the corporate/real estate department and can be reached at 516-747-6700;,,329 or by email aJesse@kirschenbaumesq.com


Looking for the KK Healthcare Exchange?  Click Here. 

MISSED OUR RECENT WEBINARS?  CLICK HERE ANYTIME!
Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
Click here to learn about
K&K's Prepaid Legal Audit/Investigation Defense Now!
Why aren't landlord's nicer and giving free rent? -September 22, 2020-Jennifer Kirschenbaum

Article

Why aren't landlord's nicer and giving free rent?

Provided by:  Jennifer Kirschenbaum, Esq.

September 22, 2020

 

Question:

Hi Jennifer & Jesse,

My landlord is telling me I still need to pay the rent for the 2 months our office was closed due to Covid.  Can I get your thoughts on this?
 

Thanks!
Dr. R


Answer:

Provided by: Jesse Kirschenbaum, Esq.

It's hard to understand from the tenant's perspective how "ruthless" landlords are being during Covid.  Why hasn't your landlord called and offered sympathy for the months closed and an offer to reduce or forgive rent?  Is he/she just a heartless person? Or, too "corporate" and removed to care?   Maybe.  But it is more likely that your landlord has his/her own obligations to meet, more specifically, likely to a lender who the Landlord has an obligation to pay each month, or risk losing the space completely.   It is also likely that any lease modification the Landlord agrees to may have a significant impact on their loan covenants (their deal with their own lender).  It is common for loan covenants to contain debt to income ratios or other conditions that require a certain amount of monthly revenue.  Some loan covenants contain vacancy rate or tenant delinquency rate covenants that limit the landlord’s ability to make concessions with their tenants.  Much like with landlords relationships with their tenants, landlords have been put in the position where they are also seeking relief from lenders.

Nevertheless, after the first couple months of Covid-19 I found most of the landlords I reached out to were open to short term lease modifications that would allow tenants to maintain operations and permit them to remain in compliance with their loan obligations.  Some landlord have been willing to defer rent and amortize the amount of rent deferred over the remainder of the lease term. Other landlords have agreed to defer rent and tack it on as extra days at the end of the lease term.   

The key to surviving this pandemic as a commercial tenant is seeking professional guidance and maintaining consistent communication with the landlord while working on a solution to making it through Covid-19 with their tenancy in tact.  We are here to help if you are looking for assistance seeking an accommodation or modification on rent.   

Jesse Kirschenbaum, Esq.
(Jennifer's cousin and Ken's nephew) is senior associate at K&K in the corporate/real estate department and can be reached at 516-747-6700;,,329 or by email aJesse@kirschenbaumesq.com


Looking for the KK Healthcare Exchange?  Click Here. 

MISSED OUR RECENT WEBINARS?  CLICK HERE ANYTIME!
Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
Click here to learn about
K&K's Prepaid Legal Audit/Investigation Defense Now!