The current Corona crisis is plunging traders into acute existential distress. Not only in Switzerland, but in almost every country in the world. Particularly affected are those industries that rely on a high volume of public traffic.
The main problem for many entrepreneurs is the rent. People have been forbidden by the state to run their businesses. At the same time, they were ordered to pay their rents on time and in full. Many feel that such a one-sided distribution of the burden of the crisis is unfair. Somehow it seems that real estate funds are getting off scot-free. What can you do as a business operator to get the best out of this situation?
What to do about rental costs in a lockdown?
If Legal Advice Zurich has its way, the first step is always to talk first. Don’t just ask gently, because first comes always a No. You can definitely put a little gun to real estate owners’ heads at the moment without it being perceived too offensively. Why?
If you stop paying rent, then of course the owner could give you notice. But that is not a real danger. Who would take the risk and take over your property in times like these? Who would open a restaurant or a shop in there now? Currently, commercial property operators fear nothing as much as tenants moving out. Companies are already renting out space on a massive scale because they realise that home offices work. Vacancy is the biggest yield killer.
For the landlord, that would mean you are out and then he or she is left completely empty-handed. Much more money is lost than if you were to temporarily reduce the rent by 10%-30%. You definitely have a negotiating position. You just have to know how to use it properly.
If this is too risky for you, some tenants’ associations currently recommend paying the rent only with reservations. To do this, you inform your landlord by means of a form that you are only paying the rent in order to avoid termination. However, you reserve the right to reclaim larger sums at some point. The prospect of success depends on what the governments of the respective countries are prepared to do at some point to remedy this unequal distribution of the burden of the crisis.
Some tenants have already stopped paying rents, citing rent deficiencies. However, such lawsuits have all failed in the courts so far. The reason for this is that the owners cannot be held responsible for the fact that the state has imposed a closure.
The situation is precarious for many companies. Businesses are getting into massive debt because of their rents. State aid comes slowly or not at all, because the disbursement criteria always contain stumbling blocks and exclusion criteria.
It is certainly not possible to completely free oneself from the burden of rent. But shopkeepers also have some leverage that they can use against their landlord.