<aside> 1️⃣ This is the first guide from Uppercase COVID19 Retail Guide for Founders

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Your monthly rent is likely one of your larger expenses. COVID-19 has forced non-essential businesses to close in most states in the US and provinces in Canada. It's important to take the right steps and know what options you have as well as understand your landlord's perspective.

Table of Contents

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Rent Abatement

Rent abatement is the reduction of your monthly rent. This is your best case scenario and depends heavily on your landlord, and if they are in a position to provide reduced or free rent. Typically, landlords will reduce the rent to an amount equal to their costs of holding the property. This is a partial abatement or rent reduction. A full abatement would mean not charging you rent for a specified period of time.

Asking for rent abatement is the best first step you can take. It's not likely that your landlord will be pleased to hear this, but in this time they should expect it. The worst thing they can say is "no" and then you have a chance to open up a discussion about rent deferral.

Example

• On May 1, 2020, your rent payment of $10,000 is due.
• You ask your landlord for rent abatement, and they agree to a 30% reduction.
• An amendment to your existing lease agreement is signed by both you and the landlord to agree to this.
• On May 1, you pay your landlord $7,000. $3,000 has been abated and will not be due at any point in the future.

Rent Abatement + Extension

If your landlord is not open a rent abatement due to financial obligations they have or because of the immediate loss of revenue, you can ask for abatement in the short-term with an extension of your lease agreement to provide them with some guaranteed revenue in the future. This is not a typical ask but is something that your landlord may consider. Your landlord may ask for increased rent during the extension to make up for a portion of the abatement. This is still beneficial as your main goal is to reduce current financial liabilities while your storefront remains closed.

Example

• On May 1, 2020, your rent payment of $10,000 is due. Your lease agreement ends on Dec. 31, 2020.
• You ask your landlord for rent abatement, and they agree to a 30% reduction for May but only if you extend your lease with them for the amount of time they provide rent abatement.