Every commercial building owner wishes to get tenants within the shortest period. However, it is not always an easy process, so you have to be a little creative to attract them. One of the ways you can do this is by offering rent abatement to your tenants. Below, you will see what this is all about, the importance, and other helpful information that will help you better understand the idea.
What Does Commercial Rent Abatement Entail?
Commercial abatement is an agreement between you and your tenant that allows a free rent period. This is commonly done during the lease period, but the same can apply when a rental space has not been occupied for long. This could be due to repairs and maintenance or if the tenant is doing initial improvements. In the lease agreement, the two parties agree on the lease amount and period, which can be renewed if you both see the need.
How Goes the Process?
There are various ways this can be done, and ultimately, the tenants get to save while you are guaranteed a lengthy agreement. One way you can do this is the no-pay period, which mostly applies to high-value commercial properties. Here, the tenant does not awe you any rent until the business is up and running.
From there, they can start paying rent which in most cases is in large amounts over a long period. Alternatively, you and your tenant can agree on the option to reduce the rent if the lease will be long-term. For this option, you are sure the tenant will be there for a long period while the tenant benefits from reduced rent.
How Can Tenants Ask For Rent Abatement?
As a landlord, you stand a chance to benefit from the abatement in so many ways. Therefore, tenants can freely approach you with the idea of postponing or reducing rent. First, they must create a plan and present it before you, stating their financial needs. At the same time, there should be details on how the tenant plans to repay the abated rent.
How Does Each Party Benefit?
Commercial abatement is for the benefit of both tenants and landlords. For starters, it helps you get tenants in a shorter time and for long periods. Likewise, the tenant gets protection, more so if the plan is included in the rental agreement, thereby preventing any legal issues in the future.
Hopefully, you have an idea of what a commercial abatement is all about. But if you need a deeper understanding, you should not hesitate to hire an expert to walk you through the entire process.