With a landlord who refuses to adjust his rent, Martijn is at risk of going under

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It’s impossible to imagine a greater contrast. One moment I’m videoconferencing with European Commission President Ursula von der Leyen and listening to her impassioned account of how Europe has already showered governments, businesses and employees with financial support – 3 billion euros in the last few weeks – to help them through the COVID-19 coronavirus crisis. The next I’m on the phone with my friend Martijn, a business owner. His landlord refuses to defer or even lower the rent, and he’s at risk of going under.

Any landlord with an ounce of common sense will think, “Half an egg is better than an empty shell,” as the Dutch saying goes. Sandra Phlippen Chief Economist ABN AMRO

The government has put some excellent plans in place, and provided funding on a level never before seen. However, all those measures will fail if it doesn’t address these problems that are the harsh reality facing business owners. “But what,” I hear you say, “does a rent dispute between Martijn and the landlord where he rents his gym have to do with the government, let alone the European Commission?” In normal times, the answer would be “Nothing”. The European Commission should never start interfering with business on that level, please!

The situation right now is unusual, however, and from a quick glance at the newspaper headlines I suspect that Martijn is nowhere near being the only one facing this problem. Any landlord with an ounce of common sense will think, “Half an egg is better than an empty shell,” as the Dutch saying goes. Businesses that cannot pay their rent just now and go bankrupt will yield zero euros, nor are dozens of other businesses waiting to move in right away. So discussing the possibility of paying half rent or deferring the rent would seem to be a logical solution.

Still, this solution runs into two problems. First, when a business owner makes the phone call, he or she will be talking to an agent, someone who is still stuck in the old routine and needs to meet their target of collecting 100 percent of the rent, whatever it takes. That agent’s manager is of course also not paying attention, and does not adjust that target. Even worse: the person taking the phone call might simply not care what the rental income actually is, and simply gives the same old standard answers.

Even if the property owner is willing to negotiate about deferring or lowering the rent, it all takes far too much time. That creates problems for the landlord too: renegotiating with dozens or even hundreds of tenants, and reviewing and enforcing their contracts – where do you begin?

And so the government needs to intervene, and propose or impose a standardised contract for property owners. Economists in the US have already drafted such a contract. It says that the existing contract will remain in place, except for the coming three months, and that the landlord and tenant agree that no rent will be due during those three months. Any official can translate that and send it to Dutch property owners and SMEs. Problem solved, and Martijn is saved.

Every week, Sandra writes a newspaper column for daily newspaper AD (in Dutch only), which can also be read here.

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