approaching landlord about covid closure

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Joined Feb 2, 2011
so I've had my bakery storefront for about five years and I'll be closing permanently as a covid casualty. If no one beats me to my announcement, I'll be the 6th business to close this year. our main commercial downtown is two blocks and our population is under 2k, so it's not looking great for us.

but onward to the big part: I'm month to month and have been for four years. my landlord's reaction to my initial temporary closure was "my mortgage is due," so negotiating rent wasn't really an option. I'm planning to close at the end of July and be out in sometime august. in a perfect world, I'd like to get my security deposit back and have some time to exit in august, but I'm not sure this is in any way possible. I've been an excellent tenant, always payed full rent on time, never asked for wiggle room, my dad even helped me replace ac units and fix things just to make things easier for my landlord, and he'd knock the cost of materials off rent but never had to pay for labor or do the work himself.

how would you approach this? is my best bet, "hey I realize you'll probably keep the deposit, so can I get a break on august while I move out?" or is there any advice you could lend on being in a situation like this in the past? I don't think many of us have experience going under during a pandemic, but I just really don't want to eat shit on my way out the door, and will take any insight on negotiating a reasonably priced exit on a commercial storefront. my only fear is that he's going to be wildly unbudging because I doubt someone else is going to open a business at this time.

thanks in advice for any advice you can lend.
 
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22
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Joined Feb 2, 2011
if it's helpful at all, I built a dutch door that slides into place in my doorway during business hours, and fashioned a hanging sign reading online order pick-up only; the bottom of the dutch door has the link to the online store (super simple format) and at the top are bi-fold doors and a remote doorbell. you can order the night before or the day of, and pick up your order by giving your name after ringing the doorbell. and WOW people are brats and they don't want to do business differently than usual. also, the bakery is about 8-9 feet wide depending on where you stand, and there is no space for additional ovens, or anything else that could help to reorient the trajectory of production to rely less on individual retail sales. I've done my best to crunch my numbers and look at my options, but breaking even before I even consider paying myself is practically impossible. I can call it early and reorient my life while I still have money to settle up and move forward, or I can hemorrhage money until I close because I have nothing left.
 

kuan

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This may not help you, but my brother has delivery sites for his restaurant. Every day he will arrive at these sites on schedule and hand out prepaid orders.

But you can use your bakery as a production facility and find a different outlet like someone else to hawk your wares for you?

If you can't I don't think you should be generous. I would declare dissolve your company, declare bankruptcy, start packing now, remove everything but essentials.
 
22
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Joined Feb 2, 2011
This may not help you, but my brother has delivery sites for his restaurant. Every day he will arrive at these sites on schedule and hand out prepaid orders.

But you can use your bakery as a production facility and find a different outlet like someone else to hawk your wares for you?

If you can't I don't think you should be generous. I would declare dissolve your company, declare bankruptcy, start packing now, remove everything but essentials.
I've already been doing pre-purchased online orders, it's not enough; and my bakery is too small to reorient production trajectory to do wholesale through other outlets. I don't need to declare bankruptcy, I need to close so that I don't have to declare bankruptcy months from now. I just need some help in approaching my landlord to manage my exit.
 
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Joined Mar 1, 2017
Speculation is not your friend here. You won't know what his reaction will be until you sit down with him face to face and tell him your situation. If he is not willing to work with you, then, your choices become severely limited.

But, before you do anything, I would encourage you to gather proper advice from an expert in terms of how much notice you're required to provide before vacating the premises. If there was an actual written lease, that document would spell out the details in terms of notice etc. In the absence of a lease, the general rule is 30 days but, that can vary from state to state. You may be wise to spend a few dollars and talk to a lawyer just to get some proper information, not to engage your landlord......at least, not yet.

The absence of the lease is both a blessing and a curse here. You may have to eat your security deposit but, then again, you don't have to run right out and write a check for the last month's rent either. So, that sward cuts both ways.

I would encourage you to speak with an attorney before you do anything so you know exactly what your rights and obligations are and what his rights are as a landlord. This will go a long way in helping you resolve the matter as cleanly as possible.

Good luck. :)
 
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Joined Dec 23, 2004
I don't have any sage advice but I want to say good luck, pastrysautegirl. This COVID-19 deal has been brutal for the industry and the entire world. Hopefully you'll land on your feet and the next thing will be better.
 

kuan

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Joined Jun 11, 2001
I think a pure ask without anything to give would be difficult. Take an inventory of what you are willing to offer. maybe trade, sweat equity, in lieu of money. That would be my first step.
 
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Joined Feb 18, 2007
Playing devil's advocate here - if you are moving out in August, you should pay rent for August. I had an early termination clause in my last lease and I gave notice in December and paid for January and i moved out on Jan 3. The termination clause called for a "fee" of one month's rent. I didn't expect to get my security deposit back because the LL was a slum lord and I knew they would find pretend things to say I couldn't get it back. I took pictures of the unit after I cleaned it so there was proof of how it was left. See if there was a termination clause in the lease you had and follow that.

How much equipment are you taking with you? is it possible you can sublet the space to someone who's trying to launch a food business, like a food truck?
 
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Joined Sep 17, 2018
If you are paid up to your current date then they will just take the security deposit for any remaining missing payments. If the security deposit is being forfeited for another reason you could try to pro rate your rent there by the days instead of the whole month to save a few bucks. But I wouldn't expect a miracle, especially if you aren't giving a ton of notice of your plan to vacate. I know it sucks but the landlord is a business too and has their own bills to pay to stay soluble. I'm surprised you didn't qualify for any of the small business loans?
 
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Joined Aug 15, 2003
If you are current on your rent and the space is in good shape, why wouldn't you get your deposit back? Aren't you entitled to that money as long as there isn't damage to the unit?

Why are you waiting until the end of July to close? Why not just close now/as soon as you've gone through current inventory?
 
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Joined Oct 10, 2005
Over four years and LL doesn’t want a lease, likes his month to month, huh? And the unit is only 8’ wide and LL can’t be bothered to fix the AC? Maybe I’m reading too much into this.

sgsvirgil is right about consulting an attorney, but lawyers don’t come cheap, and if the fees are more than half of your rent, I wouldn’t bother and just “ eat” your August rent. But when you do move out take pictures of everything and get a notary public to sign them. Unfortunately you don’t have a lease to say what kind of shape the place was in, what kind of leasehold improvements or repairs you have made.

Let’s say you do move out August, what are the odds the LL will find a new tenant in a month? 6 months? What are the odds the new tenant will pay as much or more than what you are currently paying? These “what if’s” take a big steaming dump all over LL’s claim of “ I got a mortgage to pay, honey”, and the odds of LL getting some kind of coved financial relief himself are pretty good too.

What I’m saying is that you do have bargaining power, but only if you bargain with LL. because once you move out LL won’t be seeing any rent money for a while.

Hope this helps
 

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