Dealing with your commercial tenants in the current tough time

The current health situation and other issues gripping the nation have impacted landlords of commercial real estate in Texas and across the U.S. Running any kind of business can be difficult, but when circumstances arise beyond the control of the business owner, difficult challenges may result.

Navigating these challenges may be critical to long-term survival, and professional advice is often required.  This is true for the landowner renting a property and the business owner who has leased it.

For commercial property owners who rent to businesses, it can be complicated to determine what steps to take when a renter is unable to pay the rent due to governmental shut-down mandates and customer limits. Some property owners have the flexibility to help renters until the circumstances improve. Others, however, cannot do so because they have expenses of their own. Governmental assistance may help,  but it is not a short-term solution.

Various issues may prevent full payment of rent. Some enterprises worry that the limits on occupancy make it untenable to open while paying employee salaries. Some property owners have even informed tenants about the necessary steps to apply for government help like the Paycheck Protection Program (PPP), which may help partially cover their losses during this difficult time.

Even as mandates loosen, commercial property owners must understand tha total recovery of all lost rental payments may not be possible.  In some cases, they may have to recognize that the foreseeable market rate has dropped. They may need to renegotiate lease terms to retain their tenants.

The specifics of a lease are crucial if a landlord seeks payment in full. A commercial real estate lease is a contract, and landlords may opt to enforce their rights fully.

At the same time, it is important to understand available alternatives to maintain a relationship with a lessee that, before the health challenges and bad times, was fruitful for both sides.

Commercial real estate owners need to consider how to move forward. Standing  on strong legal ground is essential. That requires experienced guidance, advice and representation. If landlords have a lease to enforce or are seeking an alternative that could save the lease in the long term, contact an attorney who is experienced with commercial real estate disputes.