Why Your Landlord Denies your Request for a Rent Reduction and Other Lease Modifications

In the course of helping our clients with renegotiating the terms of their lease and modifying their rent, we come across some situations where landlords have denied their current tenant’s request for rent reductions.  In some of those cases there are things that can be done to change the landlord’s mind.

The #1 reason a landlord denies a rent reduction request is that they feel that the tenant has not taken all possible steps to streamline the operation to maximize gross & profit margins.  If you have executed a good plan that has resulted in, then it is important to document all of the steps that you have taken as the business owner to increase profitability.  Showing all of the consideration and effort put into adapting your business to the recession is motivation for your landlord to help out with modified lease terms.  Which makes sense, since your landlord will feel like the only party that ‘working’ to make a difference if you have not created or implemented changes in your business first.

Another primary reason that landlords will cite in denying a rent reduction request is that the business has grown old and appears ‘tired.’  What this means that the landlord wants to see renovations to the space to make the business more visually attractive.  This is a tougher reason for you to overcome, because you may  be at a point where you are not interested in committing any more capital  to budget for a remodel.  This is why landlords often like to see a change in ownership of the business, so that there is an infusion of new capital into renovation/remodel to give the business a new life and personality.  The choice is tough here, do you stay in the business and get by with your profits eaten up by the rent, or do try to sell your business to a new buyer who will commit to what the landlord wants done to the space?   Cut your losses short and buy back you time, or stick it out?

Only you can answer that.  If you would like to discuss your situation to get some additional feedback, contact our Client Care Manager, Sonia Chhabra at (888) 926-9193 or email cs@justelementary.com