Be a supportive landlord, but don’t be taken advantage of
Most landlords want to see their tenants succeed, particularly in commercial properties. But if you’re helping a tenant out by deviating from your lease, make sure that “being nice” doesn’t mean “being taken advantage of”.
Most proactive Landlords want to develop good long term and harmonious relationships with their tenants and this is a good thing. They also want their tenants to be successful not only because they are able to pay the rent but it also creates vibrancy for the buildings they occupy – especially in retail centres.
Sometimes being nice to a tenant has unintended consequences and this can come back to haunt a Landlord.
We had an incident recently where a commercial tenant was struggling to pay the rent and they appealed to the Landlord for help.
The Landlord, who was being sympathetic, offered to lower the rent for a period of three months so that the tenant had a chance to get back on their feet financially.
At the end of the three months grace period, the tenant approached the Landlord again requesting that the lowered rent be continued.
At this time, they also indicated that even with the lowered rent they weren’t sure if their business would survive. The tenant went on to inform the Landlord that if anyone was interested in taking over their space that they would be willing to give it up to a tenant that had the ability to pay the full rent.
The thinking of the Landlord was that they already had vacancies in their strip mall and that any rent is better than no rent – a reasonable tactic. So they agreed to the continued low rent.
The Landlord advised his leasing agent that the business might fail and to be on the lookout for potential tenants that could occupy the space should this occur.
The leasing agent – in turn- advertised the space in their brochure along with the other vacancies in the building.
The next month, the tenant pulled a “midnight move” (on the Landlord) and vacated with no notice.
They then turned against the Landlord claiming the Landlord had terminated the lease when they notified the leasing agent of the situation.
This is a good example of when trying to be helpful to a tenant can come back to bite you.
As a Landlord, it you ever decide to help a tenant and it deviates from your lease document, we recommend that you discuss the matter first with your property manager and your lawyer.
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