Rent Relief Requests and Other Tenant/Landlord Issues

The following information provides a general summary and is for informational purposes only. It is not intended to be comprehensive, nor does it constitute legal advice. Specific legal advice should always be sought before taking or refraining from taking any action.

As the COVID-19 pandemic continues to disrupt the fitness industry across the globe, relationships between tenants and landlords will be tested. Now that Federal, State, and County mandates are expiring, many businesses are faced with the reality that past due rents must be paid up. It's only a matter of time before you'll be contacted by your landlord. It's our recommendation you make first contact and have open communication about negotiating rents. There are no winners in this situation, so be creative and be ready to negotiate.

Here are some viable alternatives to mitigate the past due rent:
Rent Reduction - You could request the landlord reduce your rent for a portion or all of the term left on the lease. The usual forms of rent reduction are to reduce the base rent, operating expenses, or both.
Rent Deferral - In this case, you would request the landlord defer a portion of your rent, but you would need to make arrangements to repay the rent deferred at a later time, either in a lump sum or by increasing subsequent payments.
Rent Abatement - If you are significantly past due on rent payments, your landlord may agree to forgive a certain amount of the past due rent if you remain current thereafter. Remaining current might mean requesting a lower base rent until you get back up to speed.
Loan Conversion - Rather than abating past due rent, your landlord may agree to convert the past due rent into a loan payable over time. The tenant would, however, continue to pay the current rent. The loan is then evidenced by a promissory note that is cross-defaulted with the lease. If possible, avoid giving any personal guarantees.
Rent Deposit - If the landlord holds a deposit, you could request this amount be credited against your current obligations. However, expect your landlord to request that you fully replenish your deposit at a later date.

For more information about the above topic, contact Gary Hood at 925-672-4800 or email