Tenant payment issues are a sensitive topic with the choppy waters of Covid-19 swirling around us. But regardless of the market conditions at play, any rent and operating expense (OPEX) arrears require a swift recovery plan.
The team at Viranda have been guiding commercial landlords and tenants on this issue since 1986. However, with the varying alert levels and lockdowns affecting businesses nationwide – it is crucial to negotiate a fair agreement while we continue to face this unknown pandemic.
Missed rent and/or OPEX payments is not okay! But the key message here is that Viranda acts for the property owner – shouldering the stress and collaborating with tenants to negotiate a workable solution to ensure imperative expenses are paid on time.
Our goal is to minimise the disruption and risk to the Property Owner. Wherever possible, supporting tenants in occupation is a smart strategy, because rent of some capacity is better than a vacancy. As part of rent or OPEX recovery, it is prudent to look at issues from both the landlord and tenant’s point of view. After which, the commercial lease agreement will come into play.
Viranda promotes a Net Lease Agreement where the tenant pays the full outgoings (e.g. municipal rates, water rates, compliance costs, insurance premiums, and all repair & maintenance costs). If payments are missed, our Asset Managers will act quick to ensure payments are made and the landlord is protected.
There isn’t a ‘one size fits all’ response to payment recovery. Rather, it is a relationship exercise to negotiate a fair solution. Viranda is the barrier between the owner and tenant. Our approach begins with a sensitive conversation and escalates to a harsher response as necessary.
“A favourable lease agreement that we have negotiated from the get-go will prove invaluable. Every single clause in the Lease is important, particularly the default interest clauses. The threat of incurring penalties is often enough to motivate a tenant to make payment,” reflects Viranda Asset Manager, Rosie Hartwell.
“While we have zero tolerance for rent/OPEX arrears, every strategy we recommend is made on a case-by-case scenario and with approval from our Clients.”
Encountering difficulties with tenants does happen from time to time. Missed payments can put a building’s insurance cover in jeopardy, and improper termination can result in legal action. It is our focus to resolve the issues before they escalate.
In more than 32 years of operating, Viranda and the team have developed a comprehensive response plan to ensure the least possible disruption to property owners. If you would like to discuss this topic further, please get in touch.
