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What to Do If You Can’t Pay Your Commercial Lease During the Pandemic

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The COVID-19 pandemic presents a plethora of problems for the majority of people. Both large and small businesses took a massive hit at the onset, and this resulted in numerous business closures, as well as hundreds of thousands of lay-offs. 

The economic shutdowns have made it difficult for struggling businesses to recover and it’s not uncommon to find that many business owners are unable to pay their expenses. One of these expenses is their commercial lease.

The painful truth is that many businesses are finding it difficult, if not impossible, to make their monthly rent payments. This is a real problem that needs to be addressed. Here are some of your options if you can’t pay your commercial lease:

Talk to Your Landlord

Faith Based Events

The first course of action should always be to discuss things in good faith with your landlord. It’s completely possible to renegotiate the terms of your contract and to secure a rent deferment plan or a reduced monthly payment. Most landlords are open to these options because of their practicality. 

The fact that there is limited access to courts, and the general perception that courts are likely to be averse to evicting a tenant based on pandemic-related deficiencies will play a major role in whether the landlord decides to evict you. Another thing to consider is that it’s going to be difficult to replace an existing tenant because of the economic conditions.

Review Your Contract

If there is a failure to renegotiate the terms of your commercial rent, you need to review your lease to determine whether a tenant has an explicit contractual right to terminate a lease or to withhold rent. 

If for some reason, the tenant is unable, or for strategic reasons, unwilling to adhere to the terms of the lease, a tenant may invoke a common-law defense to non-payment or abandonment. Of course, if you decide to take this route, you’re going to need commercial real estate agents like the ones from the Jeff Tabor Group to help you determine the best course of action, whether it’s to help you negotiate for more manageable commercial lease terms or to help you find office space that suits your situation better.

Eviction Is Unlikely

Due to a shortage of personnel and other resources, the courts are significantly hindered in their operating capacity. In fact, landlords are highly encouraged to negotiate with their tenants regarding lease terms during the course of the pandemic.

This does not mean that tenants are no longer obliged to pay rent. Courts may delay and defer payment, but they cannot rescind the obligation in a private contract as this would be deemed as interfering with a contract, which is illegal. A landlord will eventually enforce the terms of the lease.

These tips should not be misconstrued as a means to escape your obligations, but rather, a means to negotiate for more manageable terms. Remember the fact that tenants and lessors are affected alike. It’s during crises like this that we need to keep in mind that we’re here to share the burden together, not to take advantage of one another.


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