Lease Template for COVID-19
A free, quick, and easy template for renegotiating commercial lease contracts in the time of COVID-19. Intended to relieve pressures on small businesses, and retain paying tenants for landlords.
Read the op-ed motivating the template’s creation here [link].
Download the template here [download link], or simply click the template preview.
Questions? See the FAQ section below.
Disclaimer: This lease revision template does not constitute legal advice. If you need legal advice, please contact a licensed attorney in your state.
FAQ
(this is not official legal advice):
What is “D/B/A”?
“D/B/A” is short for “doing business as:” this is a legal designation that refers to the name that the business commonly uses. For example, your business might be legally named “John Smith Holdings LLC” but you might be doing business under “John’s Pizza Express.” If you are not sure if you have a D/B/A, chances are good you do not have one.
What do I do with the “BACKGROUND” section?
Nothing! This section explains why the lease is being changed. Just leave it alone.
What percentage goes in the blank in the first part of the “AGREEMENT” section?
The tenant and the landlord should determine a percentage that works for both of them. The percentage put in this blank will be multiplied across the amount of rent that would have been paid during the three months where rent is not paid (April, May, and June). This is the “deferred rent.” The “deferred rent” is then divided by six. This amount is added to the rent payments due in the first half of 2021 (January, February, March, April, May, and June).
For example, assume the following:
Usual Rent: $1000
Percent of Monthly Rent Deferred for COVID: 50%
Number of Months for which Rent is Deferred: 3 months
In this scenario,
The tenant usually pays $1000 in rent every month. The tenant and landlord agree to pay / defer 50%. They would write “50” in the blank space.
The “deferred rent” is (original rent) x (percentage deferred) x (number of months in relief period), for this example: $1000 x 50% x 3 = $1500
The amount of rent now due each month in the first half of 2021 is (deferred rent) ➗ (number of months in repayment period) + (original rent), for this example: $1500 ➗ 6 + $1000 = $1250.
For another example, assume the following:
Usual Rent: $1000
Percent of Monthly Rent Deferred for COVID: 100%
Number of Months that Rent is Deferred: 3 months
In this scenario,
The tenant usually pays $1000 in rent every month. The tenant and landlord agree to pay / defer 100%. They would write “100” in the blank space.
The “deferred rent” is (original rent) x (percentage deferred) x (number of months in relief period), for this example: $1000 x 100% x 3 = $3000
The amount of rent now due each month in the first half of 2021 is (deferred rent) ➗ (number of months in repayment period) + (original rent), for this example: $3000 ➗ 6 + $1000 = $1500.
Summary of Examples:
What if the original lease expired before June 2021?
The contract would be extended until June 2021. That is, the tenant will occupy the space and continue to make rent payments until June 2021.
What if a tenant wants to leave their contract?
If the tenant needs to break the lease before June 2021 (for example, the tenant decides they no longer need the space) the tenant owes however much of the deferred amount has not been paid to the landlord in addition to any amount required by the original lease. For example, if the tenant in the example above (rent is $1000 per month and 40% deferred was agreed upon) was to leave in April, the tenant would owe the additional amount they would have paid in May and June. In the example that would be $200 each month, which means $400 due immediately on the day in April the contract is terminated. This $400 is in addition to whatever early-termination penalty might be present in the original lease.
What if the lease says something different from the amendment?
The amendment will overrule any conflicts with the lease. Wherever there is not a conflict between the two, the lease will still remain in effect and not changed.
What does it mean that the agreement may be executed in counterparts?
This means that the tenant and the landlord do not need to sign the same copy of the amendment for it to be legally binding. This means the landlord can have a physical copy that they signed and the tenant can have a different physical copy that they signed. So long as the entire document (except for the signature section) is identical, these two separate signed copies are equivalent to one signed physical copy, and so would be legally binding. It is still a good idea to exchange digital (or, if absolutely necessary, physical) photocopies of each party’s signed document.
What does it mean to sign this document?
By signing the bottom of this document, you are legally agreeing to everything that is written in the document. It will exist as though it was a part of your original lease. Because it can be signed in counterparts, it is not necessary that each party signs the same piece of paper—only that the content of the documents they each sign is identical, meaning the numbers and words that fill in the blanks should be the same.