Editor’s note: The article is part of a package about small business owners struggling with rent obligations.
Dawn Cline, the owner of Aspen Copies & Office Supplies in Los Alamos, New Mexico, home to one of the nation’s most important nuclear weapons laboratories, is in a precarious situation. She’s always paid her rent on time since moving to the location in 2006, but the pandemic is hurting her sales. Her landlord hasn’t cut her any slack. In May, her rent increased to just over $3,600.
Cline seems like she deserves a break. Because of the pandemic, her revenue is down roughly half compared to the same time period last year. She’s been using a wheelchair for about a decade because of reflex sympathetic nerve disorder. “I’m in 24-7 chronic burning pain all the time,” she says. Her store’s 1940s-era bathroom hasn’t been updated, which means Cline can’t fit her wheelchair inside it. “Getting inside the bathroom that’s the size of teeny tiny itty bitty little closet—I have to scoot in on handrails,” she says.
When she approached her landlord about giving her a break because of the pandemic, it didn’t fly. Instead, her landlord offered loans at 5% interest. Cline didn’t feel comfortable taking on debt from her landlord. “It’s like loaning money to family; something is going to go wrong,” she says.
To get by, Cline laid off two employees—she still employs her husband—and is using her personal credit card to pay her home mortgage and business debts. “Every dollar that walks through the door is 100% going to rent,” she says. She’s debating whether to close the business when her lease ends in April. Her customers are aware of her situation. They encourage her to stay in business—sometimes they leave cash on the counter as donations when her back is turned. She tells them she’s trying but making rent today “is the hardest thing in the world.”
Revenue reached almost $300,000 last year. She’ll be surprised if it reaches $100,000 this year. The business is her sole source of income. “I’m 47 and in a wheelchair,” she says. “I’m never going to get hired anywhere.”
Don’t give up. “Try to do your best and keep going because our communities need us,” Cline says. “Keep your expenses low.” Make your customers aware of what’s happening. “Do whatever it takes to keep them coming in.”
Temper expectations. “It’s really hard to get out of your responsibilities on a commercial lease,” but it’s worth trying, says Sylvia Novinsky, director of North Carolina Pro Bono Resource Center, which is coordinating free consultations for small businesses and nonprofits. Over 160 have made use of the services. “Can the landlord really get another tenant in these times?” she says.
Expect contradictions. Businesses are finding landlords act differently month to month, tenant by tenant, says Alice Scott. Many who were willing to cut a break during the first few months of the pandemic no longer are. They vary in how they treat different businesses, negotiating with one and refusing to with another even though they’re in the same building.
Talk to an attorney. For a pro bono consultation, search this Legal Services Corporation map and this Lawyers for Good Government page, and look for commercial lease assistance programs like this one in New York. “Very often people just don’t have the money to spend on a lawyer to get a question answered,” says Novinsky. An attorney can help orient you to what to focus on—what you should or should not do next. She says that guidance can be invaluable.
Understand your lease. Your attorney can tell you what your responsibilities are, what happens if you default, and what your rights are–it varies by state. They’ll likely also look for force majeure clauses, which can excuse nonperformance related to extraordinary unforeseen events. Also bear in mind: “Just because it’s not in the lease doesn’t mean you can’t negotiate it,” says Gonzalez.
Prepare to get emotional. Experiencing a commercial lease issue is anxiety-provoking, particularly if you depend exclusively on the business for your family’s livelihood. “The ability to talk to an attorney who is not going to be emotional, who will hopefully will provide a calming influence, is really helpful,” says Novinsky.
Eviction Filings by Big Landlords Surged After Trump Issued Ban; a primer on commercial leases and Covid-19; an explainer on rent negotiation; and an interview with an experienced mediator.
For more stories, strategies, and advice for Main Street business owners, check out the Bloomberg Businessweek Small Business Survival Guide.