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Questions for Small Business Owners

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Bratkartoffeln

All-Conference
Jan 1, 2003
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Have you received any federal or state government financial assistance because of the pandemic?

Has there been any possibility of getting help for any business loss?

My wife and I operate a small business--very small (booths in an antique mall). No, I am not interested in getting money, nor do I think we are even eligible if such funds did exist. We are obviously not knowledgeable of any help for small businesses, but I thought that some help was available in the first stimulus package.

I'm interested in knowing because it might appear that the business owner from whom we rent space is charging us unfairly for part of the two months for space while retail outlets were ordered closed. To us, that is unfair and worthy of our time and effort to fight it.

So, I would appreciate your feedback. Thanks in advance. No numbers are necessary of course; just a yes or no would help us as we go forward with this dispute.
 
H

HymanKaplan_rivals48997

Heisman
Aug 14, 2001
37,578
60,327
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I don't see what is unfair about it.

My wife owns a salon, and rents the retail space. She signed a 2 year lease and was responsible for the 2 months rent, in spite of being forced to close.

I'm no lawyer ball, but IMO; unless the property becomes unfit for use (through neglect by the property owner, acts of God etc.) I would think it's perfectly fair for the renter to expect payment.

It wasn't the property owner that forbade her from operating.

Handel on the Law
 
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B

Bratkartoffeln

All-Conference
Jan 1, 2003
3,641
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HymanKaplan said:
I don't see what is unfair about it.

My wife owns a salon, and rents the retail space. She signed a 2 year lease and was responsible for the 2 months rent, in spite of being forced to close.

I'm no lawyer ball, but IMO; unless the property becomes unfit for use (through neglect by the property owner, acts of God etc.) I would think it's perfectly fair for the renter to expect payment.

It wasn't the property owner that forbade her from operating.

Handel on the Law
Click to expand...
You don't see that it's unfair because you do not know the contents of our rental contract/agreement, and aren't aware of the facts in this case, one of which is that the landlord reduced rent 50% for two months to the subletting business. Your wife had the ability to negotiate for a reduction in rent, or perhaps a deferral, to be paid at a different time in differing amounts. Owners also should have business insurance to cover potential loss of rent during unprecedented times. She should not be penalized because the government and not the landlord ordered the business closed. Additionally we do not rent space in a mall to store goods--we rent to sell, so now we likely come under an "impossibility of performance" that would apply here. This two month period was a national health emergency. That, and their violation of the contract, are the major items that make this unfair.

I have also just learned about some of the major tenets of the CARES Act. Small businesses can get some relief for employee payroll, and owners can apply to get an economic injury disaster loan (EIDL) up to $10k to cover for business losses incurred during this emergency. That does not have to be paid back, and is not taxable income. It would appear that we, and potentially your wife's business, has some recourse to apply for this small business relief.
 
G

Glenn's Take

Heisman
May 20, 2012
12,475
14,647
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I am no lawyer but I do handle payment of over 2,000 leases across the country, both commercial and residential. I don't know the specifics of your lease but there isn't one landlord in the country that said we didn't have to pay. 2 gave us voluntary rate reductions (50% in both) and I really don't know any other reason than out of the goodness of their heart. It's not that I'm not sympathetic but I just don't see what legal grounds you have unless their is something specific in your lease.
 
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UKGrad93

Heisman
Jun 20, 2007
17,437
22,789
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My small business received $58k in grant money. The a-hole landlord has refused to budge on the rent. In fact, he said that he might use his Trump check to make improvements to the office and double our rent.
 
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DSmith21

Heisman
Mar 27, 2012
8,297
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Glenn's take said:
I am no lawyer but I do handle payment of over 2,000 leases across the country, both commercial and residential. I don't know the specifics of your lease but there isn't one landlord in the country that said we didn't have to pay. 2 gave us voluntary rate reductions (50% in both) and I really don't know any other reason than out of the goodness of their heart. It's not that I'm not sympathetic but I just don't see what legal grounds you have unless their is something specific in your lease.
Click to expand...

Force Majeure clauses in leases may allow some relief for tenants depending on how they were written. These are also known as Act of God clauses.

https://www.schwabe.com/newsroom-pu...rce-majeure-clauses-for-landlords-and-tenants
 
T

Tskware

Heisman
Jan 26, 2003
24,922
21,281
113
Glenn's take said:
I am no lawyer but I do handle payment of over 2,000 leases across the country, both commercial and residential. I don't know the specifics of your lease but there isn't one landlord in the country that said we didn't have to pay. 2 gave us voluntary rate reductions (50% in both) and I really don't know any other reason than out of the goodness of their heart. It's not that I'm not sympathetic but I just don't see what legal grounds you have unless their is something specific in your lease.
Click to expand...

I am a lawyer, and we have researched the issue, and so have many of my peers, and in general, unless there is a specific exclusion for pandemic (highly unusual), we believe even the typical force majeure clauses will not excuse payment of rent.

That being said, I believe a number of LLs are working with their residential and commercial tenants to give at least some relief, if they can. Courts are closed, here in Ky they won't even let you file an eviction action at the moment, so it seems to be good business to give a tenant a bit of a break.

Unfortunately, many commercial properties are encumbered by mortgages, which have to be paid, so the LL may be between a rock and a hard place as well and does not have the ability to forgive the rent. In fact, it may even be a violation of the loan agreement to do so without the lender's consent.
 
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Glenn's Take

Heisman
May 20, 2012
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CB3UK

CB3UK

Hall of Famer
Apr 15, 2012
62,652
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I would think it would be no different than paying your mortgage during this TBH.

That being said, of all the things the government decided to get involved with and eff up and interject themselves into, small business assistance was and is at the top of every single list of common sense items therein.
 
B

Bill - Shy Cat

Heisman
Mar 29, 2002
11,454
13,597
0
Should have obtained a forgivable PPP loan. In addition to payroll, an unincorporated business owner can include the earnings he/she/they made in prior year if they distribute the loan proceeds to themselves. Rent, utilities, and mortgage interest is also included in the loan forgiveness calculation. Asked your banker for help ASAP.
 
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T

Tskware

Heisman
Jan 26, 2003
24,922
21,281
113
Glenn's take said:
I am merely the accounting guy so I don't know the ins and outs. I do know that we are paying for offices right now that are not being used because people are working at home. That is all commercial though, not retail.
Click to expand...

A friend of mine works for Wells Fargo, and he told me they have 250,000 employees, 200,000 of which are currently working remotely. Among many other impacts of this pandemic is that an ungodly amount of commercial office space is all of a sudden going to be deemed unnecessary by large tenants who discovered they can get by easily on a % of what they were renting.
 
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Glenn's Take

Heisman
May 20, 2012
12,475
14,647
113
Tskware said:
A friend of mine works for Wells Fargo, and he told me they have 250,000 employees, 200,000 of which are currently working remotely. Among many other impacts of this pandemic is that an ungodly amount of commercial office space is all of a sudden going to be deemed unnecessary by large tenants who discovered they can get by easily on a % of what they were renting.
Click to expand...
I wouldn't want to be invested in commercial real estate right now.
 
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U

UKvisitor_rivals101449

All-American
Jan 3, 2007
18,099
8,602
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If I was some one interested in a lease, I would study ingress law and my lease.

That's info for both sides
 
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T

trueblujr

Heisman
Dec 14, 2005
29,881
93,787
0
HymanKaplan said:
I don't see what is unfair about it.

My wife owns a salon, and rents the retail space. She signed a 2 year lease and was responsible for the 2 months rent, in spite of being forced to close.

I'm no lawyer ball, but IMO; unless the property becomes unfit for use (through neglect by the property owner, acts of God etc.) I would think it's perfectly fair for the renter to expect payment.

It wasn't the property owner that forbade her from operating.

Handel on the Law
Click to expand...
Handel on the Law. Is it Just me or does that dude sound exactly like Saul Goodman?
 
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C

Chuckinden

All-American
Jun 12, 2006
18,974
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UKGrad93 said:
My small business received $58k in grant money. The a-hole landlord has refused to budge on the rent. In fact, he said that he might use his Trump check to make improvements to the office and double our rent.
Click to expand...
That's one of the reasons I found a stand alone building perfect for my business and bought it years ago.
 
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H

HymanKaplan_rivals48997

Heisman
Aug 14, 2001
37,578
60,327
0
TheBlueMax said:
You don't see that it's unfair because you do not know the contents of our rental contract/agreement, and aren't aware of the facts in this case, one of which is that the landlord reduced rent 50% for two months to the subletting business. Your wife had the ability to negotiate for a reduction in rent, or perhaps a deferral, to be paid at a different time in differing amounts. Owners also should have business insurance to cover potential loss of rent during unprecedented times. She should not be penalized because the government and not the landlord ordered the business closed. Additionally we do not rent space in a mall to store goods--we rent to sell, so now we likely come under an "impossibility of performance" that would apply here. This two month period was a national health emergency. That, and their violation of the contract, are the major items that make this unfair.

I have also just learned about some of the major tenets of the CARES Act. Small businesses can get some relief for employee payroll, and owners can apply to get an economic injury disaster loan (EIDL) up to $10k to cover for business losses incurred during this emergency. That does not have to be paid back, and is not taxable income. It would appear that we, and potentially your wife's business, has some recourse to apply for this small business relief.
Click to expand...

Well boss, you f***ing asked for opinions, and didn't share all of that in your original question. If I were the landlord, I'd sue for double rent, just because you're being a douche.
 
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