This article was published in 2020 as part of our COVID-19 Resource Center series. This article will not be updated but please contact us if you have specific questions regarding the information in this article.

During this time, many tenants are approaching their landlords to ask about their rent relief options. As a landlord, if you haven’t dealt with this type of situation before, it can be hard to know what documents you need from tenants in order to make a well-informed decision.

To help with this, we’ve put together this list of documents you should request from any tenants asking for rent relief or lease renegotiations. 


Items to Request from Tenants Asking for Rent Relief

1. Financial Statements

First, you should request to see your tenant’s audited financial statements from the past three years, including year-to-date. These should also include financial statements for any guarantor or parent company.  

Ensuring the financial security of your tenant is important. These financials will show how the company, with the help of rent relief, can recover after this crisis and can provide valuable insights into the stability of the company now and in the future.    

2. Business Plan

You should ask to see your tenant’s business plan or operating summary in order to see their plans for the rest of 2020 and potentially for the next year or longer. This plan should outline how they will restore profitability and should also show cash flow projections.  

3. Current Year Budget

Current fiscal year budgets are important as well. Tenants should include anticipated and actual revenue and expenses to date. You could also request a line item detailing expenses and income during the requested rent relief period.  

You should also ask if your tenant applied for or received support under the CARES Act, as they may be able to use part of their PPP loan for rent. The requirements allow those who receive the loan to use 25% of it on rent, utilities, and other expenses outside of payroll.

4. Year-to-Year Sales & Revenue Comparisons

You should also ask to see the tenant’s current year sales and revenue, and a comparison of this income compared to the past one to three years. Also, be sure to ask what actions their company is taking to improve revenue during this crisis.

5. Operating Expenses

Tenant’s have many other operating expenses besides rent. You should make sure your tenant is evaluating all of their options for cost reductions.  

Ask the tenant to present the actions that they have taken or plan to take to reduce their company’s overall operating expenses across the board. 

Below is a list of additional information you could request, depending on the tenant:

  • Rent obligations for all locations (even if out of Austin)
  • Number of layoffs and impact of those salaries
  • Any reduced operating hours (company-wide or number of employees)
  • Any business lines cut or reduced due to the pandemic
  • Any services no longer offered 

These are all common items we have seen requested in the Austin market. They should help you determine if, and to what extent, it makes sense for you to provide a tenant rent relief.

Collecting these documents is, of course, just the first step in a complicated negotiation process. Each tenant will have a unique situation and will be requesting different types of rent relief. You’ll want to understand what exactly they’re asking for before you begin the conversation.

If you have any questions about analyzing this information or navigating these conversations with your tenant, please schedule a consultation with one of our project leasing experts

Are you interested in learning more about rent relief options in the face of COVID-19? Visit our COVID-19 Austin Commercial Real Estate Resource Center.


Andrew Reue | AQUILA Commercial

Andrew Reue

As a member of AQUILA’s team, Andrew leverages his experience in financial modeling and property due diligence to guide clients through the complete commercial real estate investment cycle from identifying purchase opportunities to disposition and everything in between.

Recent posts from Andrew

Related Content

Want the latest from the AQUILA Learning Center?

We’ll send you one email a month featuring our most relevant content. You can also manage your subscription preferences.