On March 24, a \u201chistoric agreement\u201d was concluded between representatives of tenants and landlords. This roughly meant that the rent payment could be suspended for 20 days and the rent could be paid in advance per month instead of per quarter. You can hardly call it papering over the cracks. It is clear that a real solution is needed: the break in our economy will continue for some time, but without income tenants simply cannot pay the rent. The Ministry of Economic Affairs is now mainly looking at “the market” to come up with a solution and to reach national agreements on rent deferment or rent reductions. Government intervention with an emergency law has not been excluded if the parties cannot reach a solution among themselves. However, situations vary so much that an industry-wide solution is inconceivable in the short term.<\/p>\n
It is often thought that property owners will have paid for all those properties in cash and can easily miss a few months\u2019 rent. However, most of the purchase amount is often financed with borrowed capital, so repayments and interest must be paid every month. Therefore, there is little room for deferment – let alone waiving the rent. As a landlord, do you simply have to stubbornly collect the rent and wait and see whether your tenant can survive and risk its bankruptcy? That idea does not work either. The gaps that will fall in the shopping streets will not be filled quickly. A long period of vacancy and lower rents are certainly not excluded. As a landlord you will also want to prevent your property becoming vacant. After all, there is nothing to repay without rental income. But suppose that landlords want to (or should) encounter massive problems with tenants and grant substantial rental concessions, this will have a negative effect on the value of real estate and can again lead to structural payment problems for landlords to their financiers.<\/p>\n
A number of helpful landlords have offered to temporarily (partially) suspend the rental payment or convert it into a loan that must be repaid in a short period of time. The challenge here is that once the lockdown is gradually lifted, the turnovers are not immediately back to the old level. Then there is probably no room for a payment on top of the normal rent.<\/p>\n
In order to prevent tenants who are viable in normal times and to preserve the value of investment properties, the tenant and landlord could also break open the contracts using the blend and extend method. A landlord can give a (temporary) rental discount or a rent-free period in exchange for a longer term on the agreement. Since commercial property is valued on a cash flow basis, the present value of the property can be upheld. This can be captured quite easily in a rider, without having to negotiate a whole new agreement.<\/p>\n
Once the tenant and landlord agree on the method, they will then have to agree on the payment schedule. To ensure that the present value of the rental flow remains the same, a discounted cash flow calculation is made of both scenarios whereby the present value remains the same as much as possible and at the same time creates some breathing space for the entrepreneur. In determining the new rental schedule there are all kinds of variables available, such as the period that the rent is lower, the extension period and the extent to which the rent periodically increases (indexation). In this way, something can be done to keep the entrepreneur afloat long term without it being the landlord who has to pay the majority of the bill. Most tenants will not even expect that. It is also not about unwillingness to pay but the powerlessness to pay. An additional effect is that only tenants with an urgent need will want to discuss this. Tenants who might otherwise make improper use of the situation will skip the conversation.<\/p>\n","protected":false},"excerpt":{"rendered":"
With the economy coming to a standstill and business tenants struggling to pay their rent, it is important to find constructive solutions between tenants and landlords. To get out of the impasse, Redept has the solution that gives tenants breathing space, without the landlord paying the bill.<\/p>\n","protected":false},"author":2,"featured_media":5394,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13],"tags":[1619,1620,1632,1633,45],"class_list":["post-5432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publications","tag-corona-en","tag-huur-en","tag-huurcontract-en","tag-huurkorting-en","tag-tips-en"],"acf":[],"yoast_head":"\n