D. Whether it is only a basic rent or a deferral of both the base rent and the additional rent. Where possible, the owner should try to cover at least the operating costs during the deferral period in order to limit the amount that the owner has to pay out of pocket for his fixed costs. In the event that the lessor is required to finance tax and insurance reserves under its mortgage, the lessor should ensure that it has sufficient operating revenue to meet those reserve requirements. Despite a deferral of the additional rent, the tenant must remain responsible for any incidental costs, parking or other services directly used by the tenant (for example. B HLK outside opening hours). If the additional rent is also deferred, the lease amendment should reflect how operating expenses will be carried forward for the 2020 calendar year, where the delimited amount is based on operating cost estimates and where actual operating expenses are different. Credit conversion. Instead of saving the rent due, a lessor can agree to turn the derrears rent into a loan payable over time. However, the tenant would continue to pay the current rent. The loan is then sanctioned by a debt instrument late in the rental contract. While the coronavirus has led the government to ban tenants from being kicked off their premises, many tenants, sheltered from evacuation, mistakenly think they don`t owe rent. The landlord`s analysis must take into account that almost all tenants will be at risk of insolvency to some extent, given that COVID-19 is a “mass event” and the landlord should assess the costs and benefits (as well as the likelihood) of finding a replacement tenant, taking into account the current rental value of the area in the current economic climate and any expected rental costs.
In addition, the lessor (i) the history of defaults or late payment of rent, (ii) the risk of insolvency of the tenant if the operation of postponement of the lease is not foreseen, (iii) the risk of insolvency of the tenant if the rent is deferred; (iv) if the rent deferral has the effect of ensuring that the lessor grants more long-term rent, (v) that short-term rent is the best option for the lessor, rent and (vi) if the tenant was threatened with insolvency before COVID-19. . . .