27

Jun
2020

Renegotiating a Commercial Lease During COVID-19?

Renegotiating a Commercial Lease During COVID-19?

COVID-19 has spread rapidly around the world over recent weeks, forcing firms to shut doors, requiring numerous people to work at home, and causing a record number in these months to claim unemployment. Many of us have found ways to cut our costs in these uncertain times. You might want to renegotiate your lease for your commercial premises, if the business isn't making enough money — or worse — it had to close temporarily. One of the main reasons for renegotiating a commercial lease is to reduce the amount that tenants have to pay temporarily or permanently for their space. Let us explore why you are renegotiating and how you can order the renegotiation. Why Would I Renegotiate My Lease? Also, if COVID-19 doesn't push you to renegotiate your contract, you still benefit from learning how to do so. If your rental is up for renewal or the market shifts, you will benefit from studying the rental conditions on a long-term basis. For example, a more flexible rental term or a different rental length may be required. Also, a financial fight that has nothing to do with COVID-19 can happen in the future for your business, and it could be a business saver to renegotiate your contract. All right, those are all reasonable reasons to renegotiate a lease, but why will a lease pay less rent? Remember that these unsafe times affect all of us. Probably your Landlord is also concerned about finance and business. Also, your business may be difficult to replace if you have been a good tenant for years with your Landlord. What Kinds of Choices do I have for Renegotiation? You will have to figure out what you want and plan to achieve it before approaching your Landlord with your request for renegotiation. Having regard to COVID-19 (or due to general financial difficulties), please follow up on some requests: Rent reduction You will want to offer a lower monthly rental payment if your contract has expired and if you intend to make your renegotiation permanent. Especially if the conditions on the market indicate that you could get your requested price elsewhere, a landlord can agree to this. You can also request a temporary rent reduction with a pledge that after a certain amount of time, you will start paying the initially agreed rate once again. Rent abatement If you don't have enough income right now, but expect to get something back on the road again, you can ask for a rent abatement. Rent abatement is like a loan. This means that you will not pay the negotiated rent, but after those months are over, you will pay back the rent in its entirety, even with interest. Partial rent abatement You can also request a partial rent abatement, meaning that you’ll pay, for example, only 50% of the full rental price for the next three months, and then you’ll later pay back the other 50%, sometimes with interest. Sublease Sub lending your building space is also an option if you can take advantage of the space by another company while you don't occupy it or have extra office space that your business doesn't use. Many landlords agree sublessors, as long as this does not interfere with other property tenants' leasing terms.


18

Mar
2020

Rent exemptions to support businesses in Qatar

Rent exemptions to support businesses in Qatar

More organisations and companies in Qatar have announced exemptions for clients and tenants, in line with His Highness the Amir Sheikh Tamim bin Hamad alThani’s directives and the efforts made by the state to overcome the challenges posed by the novel coronavirus (Covid-19) outbreak.  Hassad, Qatari Diar Real Estate Company, Qatar Fuel (Woqod) and Ezdan Mall yesterday joined several other Qatari entities in extending exemptions.  In a statement, Hassad, Qatar’s premier investor in the food sector, announced an exemption from rent for tenants at Al Sailiya Central Market and Al Wakra Central Market for a period of six months, from April until September.  Similarly, Qatari Diar Real Estate Company announced a rent exemption for tenants at the company’s Lusail Marina restaurants and cafes, as well as the shops that continue to operate in Barwa Commercial Avenue (Abu Hamour), for three months starting April.  The decision comes in line with the directives of the wise leadership and the commitment of Qatari Diar towards its social responsibility, the official Qatar News Agency reported.   In view of the current circumstances, Qatar Fuel (Woqod) also announced a rent exemption for the months of April, May and June for all its tenants. “Wishing you health and wellness” Woqod said in a post on social media.  Ezdan Mall said it was exempting all retailers at Ezdan Mall Gharafa, Ezdan Mall Al Wakra and Ezdan Mall Al Wukair from rental obligations for the months of March, April and May as a “supportive initiative in facing the current challenges and as part of our national commitments”.  Earlier, Katara - the Cultural Village Foundation, Manateq, Msheireb Properties, Mall of Qatar, Barwa Real Estate Group and Aspire Zone Foundation (AZF) had announced similar exemptions.  Katara said it was exempting all investors, including owners of restaurants and cafes operating at the Cultural Village, from rent and other fees such as those pertaining to electricity and water, until further notice.  Msheireb Properties, the leading sustainable real estate developer, announced that all retailers and F&B tenants at Msheireb Downtown Doha would be exempted from their rent and utility bills until further notice. The intent of the initiative is to lighten the financial strain on investors and businesses as Qatar implements measures designed to promote social distancing and limit large gatherings”, the company said in a statement.  Manateq said all logistics parks and industrial zones in the country were exempted from rent payments for a period of six months, with effect from March 15.  AZF said it exempted retailers from rent as well as water and electricity fees until further notice.  Barwa Real Estate Group announced the postponement of rent payments at its commercial units, showrooms, warehouses, workshops and offices, for a period of three months starting April.  Mall of Qatar, too, said all mall tenants were exempted from rental costs from March until May.  As per a slew of measures announced recently to deal with the situation, food and medical goods will be exempted from Customs duties for a period of six months, provided this is reflected in the selling price to the consumer. Also, a number of sectors will be exempted from the electricity and water charges for a period of six months. Logistics areas and small and medium industries are also to be exempted from rent for six months.  Qatar Central Bank will provide additional liquidity to banks operating in the country and the banks will postpone loan instalments and obligations of the private sector for a grace period of six months. Qatar Development Bank will also postpone instalments for all borrowers for a period of six months.     Source: Gulf Times (Dated: 18/03/2020)



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