With mandated shutdowns of most non-essential businesses, the great majority of small businesses in the United States are under serious economic strain. As rents become due, many will fail to make their payments, resulting in mass defaults. This is harmful to the tenants, our small business community, but also to the landlords who value and rely on these long-term relationships. In typical times, landlords would work with tenants to work out alternatives before moving forward with eviction proceedings. But these processes can be timely and expensive.
While the Coronavirus, Aid, Relief and Economic Security (CARES) Act offers forgivable loans to help small businesses cover their expenses, millions of businesses may not survive the time it takes for the transaction. A customizable, one-page lease addendum, drafted by the authors in coordination with legal and business input, provides a simple tool for appending to and modifying any commercial lease. The authors recommend that tenants pay only 10 percent of their usual rents during the relief period, with a further recommendation that 90 percent be deferred and 10 percent permanently forgiven by the landlord.
For more information visit: https://centerforrisc.org/lease