It is also reasonable to ask the tenant`s contractors to sign a personal guarantee for the lease if they have not already done so. When they personally guarantee commitment, mandatory collection efforts are often significantly supported, even if they are limited only to payments made under the leniency agreement. The landlord requires that he grant these benefits to the tenant, often: a) an additional guarantee, as for example. B a personal guarantee; (b) that the tenant must waive any leasing option, such as a right of renewal, a right of extension or the right to transfer the lease to a subsidiary; (c) interest on deferred rent; (d) clear written recognition of the tenant for his delay and (with the exception of the leniency contract) that he has no defence or compensation for the landlord`s rights in the tenancy agreement; (e) confirmation by the tenant that the rent (or only the deferred rent) accelerates immediately in the event of a late payment and that the landlord can obtain all other remedies available to him because of the initial delay; (f) a right to pledge to the tenant`s personal property; and (g) a compensation scheme and a language of exemption in favour of the lessor. 7. Lease termination – Sometimes the best way for the landlord is to leave the tenant out of the tenancy agreement. If the tenant is in trouble and there is no money to go for the landlord, the tenant`s lawsuit in court can throw bad money. In such cases, it is useful to organize an organized outing where the lessor has the right, for example, to terminate the lease after a limited notice period. B, for example 30 days. Such agreements should be carefully formulated and state that the choice of a replacement tenant is at the sole discretion of the landlord. In addition, the landlord should not be forced to actually find a replacement tenant. Our leasing and financial restructuring sales teams have been advising clients on these developing issues since the emergence of COVID-19.

This warning is intended to provide general instructions to help commercial landlords and tenants evaluate their training options and solutions. With a few exceptions, leasing parties should be patient, moderate and should consider only practical short-term workouts. During negotiations, the parties should consider whether the tenant is or has already received relief from state aid on programs such as the CARES Act or the paycheck protection program. In these cases, the parties may decide to have the leniency agreement started after the loan deadline. In other cases, landlords may consider having their tenants pass on directly to the landlord any credit financing they receive directly to pay the rent.