When it comes to tenants that cannot pay rent, owners need to apply empathy as well as solid legal counsel, according to Jonathan Hipp of Avison Young.
The COVID-19 pandemic has raised issues the likes of which we have never dealt with before. Specifically for landlords, a constant question is how to deal with requests for rent deferrals or forgiveness. While the topic itself isn’t new by any stretch of the imagination, the volume of requests and the sheer flood of such inquiries we are hearing about in the face of massive restrictions on work plunges all of us, tenants and owners alike, into uncharted waters.
Nowhere is this truer than in the retail market, although all commercial real estate food groups are feeling the pinch. Retailers of all sizes were reduced to curbside service or totally shuttered, unless they have been blessed with the all-important label, “essential business.”
Whatever the business type, the first rule of handling rent-deferral requests is to do so with compassion. To invoke a phrase that has become sorely overworked in the past few months, we are all in this together.
So landlords have to deal with the issue of rent deferrals on the basis of empathy. Nevertheless, they still have to deal with it. Closely watching the market trends, there are a number of ways we have seen landlords attacking the problem.