Rent re-negotiation

hi,

I have such a situation. Market value for business unit has fallen quite a lot. Rent what landlord asks is €2000 plus VAT. Next door there is same unit for €1500 (not sure about VAT) and available for rent already 6 months. Our landlord is very bullheaded and reduced rent only to €1800 what he has fogetten [broken link removed] anyway and asks €2000 as before. In current market conditions it is very important to survive. Re location is not good idea for start-up business [broken link removed] . Rental agreement is due to end September 2013. What would be the best I could do in this situation? Rent is not fully paid for last 3 months because such a high rent.
Thanks

Had something similar myself recently but at least the lanlord I have for the premises in question was a lot more realistic.

I would suggest that you prepare month by month accounts for the past 6 months and show the landlord how the rent is causing problems. Look for a temporary reduction in the rent until end of 2010 and also put a clause in that if your turnover / profit hits a certain level you will pay the landlord X% of income over this to a maximum of the original rent.

e.g. if you're in retail and rent is 75k get reduction to 50k. If profitable trading comes in at 350k, then offer 10% / 15% of turnover over €350 k to a maximum of 25k.

win win for landlord & yourselves. keeps unit occupied and both parties benefit if upturn comes quicker that market expects.

pm me with your e-mail if you want a copy of letter that I used.

Tricky, if this is a commercial lease, are you at the period of a rent review this year ?? If so you may need to have a valuer to do your work for you and negotiate on your behalf the lower rent. The best evidence is the unit next door which appears to be on the market for more than 25% less than yours. Read your lease re the terms for the rent review. And bear in mind the current state of the market.

There are terms of lease from 2008 to 2013 and no any word about situation if I want to terminate lease or re-negotiate rent. Just % what I have to pay if I am late with my rent. I was told I cannot move out until 2013. I am confused what to do now, is there any law that I have a right to rent what is reasonable in current economic situation.

Landlord does not give me even a chance to negotiate rent. He say pay me what you owe me first and then we'll talk. Rent is late already 3 months because of so high rate, cannot afford this rent anymore

Its possible that the landlord is under pressure himself, but that's no excuse for the attidtude he is taking.

According to sunday tribune today traders in the top shopping centres are banding together and refusing to pay rents unless landlords agree to reductions. - Liffe Valley, Pavilions, Mahon Point cork etc.

Technically there is nothing in a lease that allows a reduction or for you to walk away, but current market conditions have made renegotiation a lot easier.

It may be a case of telling the landlord that you will have no option but to close the company if he does not negotiate as continuance of the high rent wouild put you in a position of insolvent trading - Put all correspondance in writing.

Surely if you're late with the rent as it is don't you void the rent agreement? I this is the case then talk to the landlord of the unit next door and bargain with him for his unit, given the fact that it's €1500 and move in there. You'll still be in the same area so existing customers won't be to off put be the move.

I know a guy that did just that here in limerick. Same story, 3 months behind but had given a 3 month deposit and land lord wouldn't budge on price. He just packed up one night and moved out. The same unit is still empty now 8 months later.

Don't know how legal that was or anything but something to think about anyway.

here is the piece of contract:

''That the Tenant will at the expiration or sooner determination of the tenancy peaceably surrender and yield up onto the Landlord possession of the Premises together with the furniture effects and fittings included in this letting in good and substantial repair and condition in all aspects.''

Does it says I can terminate my contract?

From the information you have given so far, I still think you require to have your own valuer to act on your behalf to get a decent deal on the rent / review. Doing these things by yourself leaves you with no room to maneuver. Rent reviews are done on the basis of location, footfall and comparative rates.

You have not stated as to what your current rent is presently.

Rent is as above €2000 +VAT, and same size and location units are currently €1000-1500 and empty for a good few months.

Speak to the agent who formed the original deal as he will most likely still be acting on the landlords behalf. The agent may take a more practical approach. If I was the landlord and you asked for a reduction and subsequently didn't pay me at all I might also see it that you were chancing your arm. Why have you not paid any of the last 3 months rent? Surely you should be able to pay part of this, if not you are slowly but surely going out of business unless you are allowed stay rent free.

I am paying rent what I can and I am going more and more in a debt. Landlord says pay what you owe me first and then we will talk about reducing the rent. He actually does not leave me any choice but to go under or run away.

I think, and excuse me for being rude, that if your business becomes inviable because of a few hundred euro per month in rent then there is a problem with the business overall. However if the landlord won't enter into meaningful discussion concerning the rent level, then he is going to get a rude awakening when his tenants start dropping off.

For start-up business every cent is on count. And it is going better and better, slowly but moving. And nobody could predict such a global crisis. I just find such a high rent unreasonable in current market conditions. If I would not be in start-up I would absolutely agree with you about those few hundred. What would do yourself in such a situation? Would you let go on the doll one of the employees just to pay that rent?