Stay home when needed
If you have or think you have symptoms or have tested positive for COVID-19, stay home and find out what to do if you are sick and find out when you can be around others.
If you are well, but you have a sick family member or recently had close contact with someone with COVID-19, notify your supervisor and follow CDC recommended precautions.
Monitor your health
Be alert for symptoms. Watch for fever, cough, shortness of breath, or other symptoms of COVID-19.
This is especially important if you are running essential errands, going into the office or workplace, and in settings where it may be difficult to keep a physical distance of 6 feet.
Take your temperature if symptoms develop.
Don’t take your temperature within 30 minutes of exercising or after taking medications that could lower your temperature, like acetaminophen.
Follow CDC guidance if symptoms develop.
Wear a mask
Wear a mask in public settings where staying 6 feet apart (about two arms length) is not possible. Interacting without wearing a mask increases your risk of getting infected.
Wearing a mask does not replace the need to practice social distancing.
Social distance in shared spaces
Maintain at least 6 feet of distance between you and others. COVID-19 spreads easier between people who are within 6 feet of each other.
Keeping distance from other people is especially important for people who are at increased risk for severe illness, such as older adults and those with certain medical conditions.
Indoor spaces are more risky than outdoor spaces where it might be harder to keep people apart and there’s less ventilation.
Avoid close contact with others on your commute to work, if possible. Consider biking, walking, driving either alone or with other members of your household. Learn how to protect yourself when using transportation to commute to work.
Wash your hands often
Wash your hands often with soap and water for at least 20 seconds or use hand sanitizer with at least 60% alcohol if soap and water are not available. If your hands are visibly dirty, use soap and water over hand sanitizer.
Avoid touching your eyes, nose, and mouth if you haven’t washed your hands.
Cover your coughs and sneezes
Remember to cover your mouth and nose with a tissue when you cough or sneeze, or use the inside of your elbow. Throw used tissues into no-touch trash cans and immediately wash hands with soap and water for at least 20 seconds.
If soap and water are not available, use hand sanitizer containing at least 60% alcohol.
Avoid sharing objects and equipment
Avoid using other employees’ phones, desks, offices, or other work tools and equipment, when possible. If you cannot avoid using someone else’s workstation, clean and disinfect before and after use.
Clean and disinfect frequently touched surfaces and objects
Clean and disinfect frequently touched objects and surfaces, like workstations, keyboards, telephones, handrails, and doorknobs. Dirty surfaces can be cleaned with soap and water before disinfection.
To disinfect, use these EPA-registered disinfectantsexternal icon.
Visit the link below to learn more about workplace safety protocols recommended by the Center for Disease Control.
1. Amortize the missed payment amounts over the remaining term of the lease. This is perhaps the most common method to deal with a COVID-19 payment deficiency. Rather than attempt to evict the tenant or seek any sums owed following the expiration or termination of a lease, the parties instead take the missed payments and roll them into the remaining amount owed for the duration of the lease and then raise each payment accordingly once the tenant has resumed operations. For example:
Tenant missed three rental payments at $5,000 per month during the COVID-19 shutdown for a total of $15,000. Now, tenant has reopened for business and has 18 months remaining on its lease. 18 months of rent at $5,000 totals $90,000. In this scenario, landlord would add the $15,000 to the $90,000, which totals $105,000, and divide that by 18 to determine the new monthly rent payment for the remainder of the lease term, which would be $5,833.33.
If the parties choose this option a lease amendment should be executed to memorialize the agreement in writing and to reflect the new monthly payment. Although a separate repayment agreement may also suffice if carefully drafted.
2. Enter into a short-term repayment agreement. If either party does not want to amortize missed payment amounts over the course of the remaining term (especially if the lease has a lengthy period remaining), then a short-term repayment agreement may work better. For example:
Sticking with the above example, tenant missed three $5,000 payments totaling $15,000. But here the parties would instead agree to pay the missed payments off much sooner. In this scenario, tenant would pay larger amounts each month to makeup the COVID-19 rent shortfall. Terms can vary, but for illustrative purposes, the parties could agree to have tenant pay an additional $2,500 to landlord each of the next six months. That means that tenant would pay $7,500 per month thereby paying down the rent deficiency in six months. Then tenant would go back to paying $5,000 per month for the remainder of the lease term.
For parties selecting this method, a separate repayment agreement will work if carefully drafted. Although the parties may still feel more comfortable executing a lease amendment.
3. Forgive all or a portion of the rent for the term the tenant was unable to operate. While this option may not initially sound like a win-win (at least to landlords) it still may be a good option for both parties. While rent forgiveness will certainly reduce the pressure on a tenant to come up with funds to pay rent for a period the tenant was not permitted to operate by governmental order, it may also build a great deal of goodwill between the parties. Some tenants may be in lines of business that are not yet permitted to reopen or are operating at a reduced capacity, while others may struggle to ramp their sales back up to pre COVID-19 levels. Not to mention that evicting an existing tenant (especially a trustworthy, long-term tenant) and attempting to find a replacement can be costly to landlords. Perhaps even substantially more expensive than simply forgiving all or a portion of the rent payments missed by a tenant due to COVID-19. As such, depending on the circumstances, landlords may want to consider this option to avoid a costly re-leasing process.
The options listed above are just a few ways for commercial landlords and tenants to attempt to work through nonpayment lease defaults resulting from COVID-19. Whether you are a commercial landlord or tenant, you can contact me to discuss these options and other unique solutions for dealing with COVID-19 related issues. You can email me at firstname.lastname@example.org or call me at 616.458.3600.