Resolving Commercial Landlord-Tenant Disputes During COVID-19

Resolving Commercial Landlord-Tenant Disputes During COVID-19

The coronavirus pandemic forced the closure of nonessential businesses throughout the country, and these closures remained in effect for several weeks. Even after these businesses reopened, distancing and other safety guidelines were put in place, and many of them were not allowed to open at 100% capacity. This situation has left millions of commercial tenants struggling to pay rent, and many of them are grappling with the question of whether or not they can even stay open.

In most areas of the country, state and local governments put a freeze on tenant evictions at least for the first few months after the shutdowns began. In addition, a special forgivable loan program called the Paycheck Protection Program (PPP) was set up through the Small Business Association (SBA) to help businesses that were struggling.

It has been several months since the pandemic started, and much of the relief that was available to small businesses has come to an end. Many of these businesses are now facing the reality that they can no longer defer paying rent on their location, and there are far fewer resources available to obtain financial help than there were at the beginning of all this. So, if their business is not back to pre-pandemic operational capacity, they are looking at some very difficult days ahead.

For business owners that are in this situation and lease the space in which they operate, the one party that they will most likely need to work something out with is their landlord. Rent is always among the biggest expenses that a commercial tenant has to pay; and coming to a workable arrangement with their landlord could be the one thing that will determine whether or not they will be able to stay open. 

Negotiating Commercial Lease Modifications during COVID-19

At this point, a business owner could be several months behind on rent for their commercial space. And although the terms and conditions of leasing agreements vary, in a large number of cases, the landlord will have a legal right to evict a tenant if they do not catch up on rent. The question, however, is should they proceed with an eviction, or is there a better way to handle this?

Looking at the big picture, it is generally in everyone’s best interests to work out an acceptable arrangement rather than having to evict a tenant from their space. Of course, the business owner will most likely want to stay in the same location (if at all possible) in order to maintain some type of stability during these unprecedented times. And if the owner has been a good tenant up until now, the landlord should also want them to stay.

Landlords must also keep in mind that in the current business climate, leasing an empty space might be very difficult. In fact, they could wind up not having the space occupied until the economy recovers, which might not be until sometime next year at the earliest. There is also the issue of the court backlog that has been created by the COVID-19 shutdown and the fact that it will take a lot more time to complete an eviction than it did before the pandemic started.

With all of these factors in play, negotiation is going to be the best option for most landlords and tenants. But this might not be an easy process either. There are a lot of issues to work out, and each side is going to have to be flexible and compromise in some areas. You could hire lawyers to do the negotiation for you, but this could be very costly especially at a time when everyone is being very careful about every dollar they spend.

One of the most preferable ways to resolve a landlord-tenant dispute and/or negotiate a modified lease agreement is through mediation. With mediation, the participants meet with a neutral, third-party mediator whose job is to facilitate a constructive discussion that guides the participants toward a peaceable and workable resolution. The process is entirely voluntary, and no agreement can become legally enforceable unless all participants agree to it.

In many cases, landlords and tenants can use mediation to work out the terms and conditions of a lease at a fraction of the cost of traditional legal methods. And in addition to saving money, participants are more involved in the process, which makes them more likely to take ownership of the results and abide by whatever agreement is ultimately reached. 

Contact AMS for Business Mediation that Works for You

If you are involved in a commercial landlord-tenant dispute or any other type of business conflict, Advanced Mediation Solutions (AMS) is here to help. Our business mediator, Carmela DeNicola, has decades of experience working in both the corporate world and with small businesses. Over the years, she has seen virtually every type of dispute that may come up in the commercial realm, and she can often help clients develop innovative and practical solutions that they may not have been aware of on their own.

We are currently offering extended hours to make things easier for those who have had their schedules disrupted by COVID-19, and we can provide either in person or virtual mediation, whatever works best for you. 

For a free consultation with a member of our team, message us online or call our office today at (856) 669-7172. We look forward to serving you!

Change and Conflict: Why Business Conflict Can be Positive and Productive

Change and Conflict: Why Business Conflict Can be Positive and Productive

“When you have a conflict, that means that there are truths that have to be addressed on each side of the conflict. And when you have a conflict, then it’s an educational process to try to resolve the conflict. And to resolve that, you have to get people on both sides of the conflict involved so that they can dialogue.” ~ Dolores Huerta

COVID-19 is forcing businesses of all types and sizes to make permanent changes. As much as many of us would like things to go back to “normal”, we are finding out that a lot of the old ways of doing things are not coming back for a while, and some will never come back at all. As a result, business owners are having to confront this realization and make adjustments to their operations based on the “new normal.”

Facemasks, distancing, sanitization, temperature checks, telecommuting, and contactless activity and interaction are some of the common elements of the post COVID-19 world we are living in, and organizations will have to figure out how to incorporate these and other changes into their operations while maintaining optimal productivity and efficiency. Implementing changes like these is sure to create conflicts among business owners, managers and supervisors, and other stakeholders.

We are obviously living in unprecedented times, and this is coupled with the unprecedented stress and stressors that everyone has to deal with. Individuals are already dealing with a lot of personal stress related to COVID-19, and then at the office, they have even more things to worry about. And when they do not see eye to eye with other associates, smaller disagreements and disputes can blow up into full-scale conflicts.

It is important to understand that although the source of a conflict might be the unprecedented global pandemic we are living in, business conflicts themselves are not unusual. In addition, these conflicts can actually become a healthy and constructive element for your business, because they often force you to confront issues that need to be dealt with and changes that need to happen. These issues will surface sooner or later, and it is always best to confront them as early as possible, so you have the time to work through them and implement the best possible solution.

The Keys to Positive Business Conflict Resolution

Conflicts can be constructive for your business, but they can also be destructive. This depends on the mindsets of those involved and how they choose to handle it. For example, a conflict in which there is a diminished level of trust among participants can develop animosities, cause communication to break down, cause other associates to take sides, reduce the exchange of ideas and information, and ultimately cause productivity to suffer.

The first step is for participants is to acknowledge that the cost of a conflict that becomes destructive and uncontrollable is far too high for everyone involved. Hopefully, there is enough goodwill that has been established between the parties over time that they know they all want what is best for the organization. They simply have a different view on how to get from here to there. 

With these building blocks in place, the conflict can be resolved constructively and even creatively. When participants trust each other and they are able to engage in open dialogue, they can speak freely and let their ideas flow. This is the environment when it is most likely that they will find common ground and develop innovative solutions, solutions that will often make the organization stronger in the long run.

There are times when constructive and free-flowing dialogue is more difficult to achieve between the parties. Maybe they are just too close to the situation; maybe the parties are listening to different associates who have opposing viewpoints; or maybe they have a vested interest in doing things a certain way; or it could be a combination of these and other factors. When there are roadblocks to constructive dialogue, a third-party view can be very helpful.

One of the best ways for parties to a business conflict to gain a strong outside perspective is through business mediation. With the help of a professional, third-party mediator, participants are often able to get back on track toward a constructive dialogue that results in a win-win resolution. 

The mediation process is entirely voluntary, and no agreement can be valid unless all participants agree. This allows participants to work together without the pressure of having to reach an agreement or having one imposed on them. The mediator can also offer a perspective that they would not receive from someone inside the organization, and participants might be made aware for the first time of solutions that others are using successfully to handle changes that have been necessitated by COVID-19, and effectively address any other issues they are dealing with.

AMS is Here When you Need Us

If you are a business or organization that might need some outside help resolving a conflict, AMS is here to serve your needs. Our business mediator Carmela DeNicola has worked in corporate America for several decades, and she has also spent many years owning and operating her own small business. She helped numerous businesses work through the conflicts and challenges created by the Great Recession of 2008, and she has been doing the same for those who are dealing with COVID-19 related difficulties.

We are currently offering extended hours to help accommodate schedule disruptions that have been created by the pandemic, and as the states are in the process of reopening, we can provide either in person or virtual mediation, whatever you are most comfortable with. Our initial consultations are free, and we are available to get started whenever you need us.

Contact us by phone or email for your free consultation. We look forward to serving you!

Adapting your Business Model to a Post COVID-19 World

Adapting your Business Model to a Post COVID-19 World

As we emerge from the COVID-19 crisis and things begin to open back up again, there are sure to be permanent changes to the way we do business. For example, handshakes may no longer be customary, at least for a while anyway. A lot more employees will work from home regularly or exclusively if the business model permits it, and for organizations that must maintain on-site locations, health and safety protocols and workplace cleanliness will be top priorities.

Given the emerging long-term nature of the COVID-19 pandemic, a large percentage of businesses may require an entirely new or modified business model – one that effectively adapts to the changes and makes the best use of their current existing resources: people, technology, and capital.

Here are some ways that an organization’s resources might need to be redeployed in order to adapt to the changes brought about by the coronavirus outbreak:

  • People: As we touched on earlier, many organizations will need to rethink the way employees are utilized. A growing number of them will work from home, and because there may be a limited number that work on location, cross-training and multitasking will become all the more important. Another area where things are sure to change is with business meetings. Organizations will hold more meetings virtually as they have been doing during the pandemic, and business travel will most likely be diminished as a result.
  • Technology: The best organizational strategies will utilize technology in a way that augments an employee’s job rather than replaces them. Telecommuting and virtual conferences on platforms like Zoom will become the norm, and some businesses will need to use technology to shift over to online sales, online payments for take-out/delivery options, virtual consultations, and other ways they can interact with customers/clients in a socially distanced way.
  • Capital: Organizations that have already built a strong technology infrastructure will be ahead of the game, while others will need to deploy capital to get caught up in this area. More resources will also need to be directed toward areas like commercial cleaning, workplace safety, compliance, and minimizing liability exposure. 

COVID-19 has hit some industries much harder than others, and these industries will need to implement bolder changes to adapt to a post-coronavirus world. For example, travel and tourism has been decimated by the pandemic, with airports and hotels resembling ghost towns. 

To bring people back, airlines, hotels, resorts, and others in the travel and accommodation industry will have to implement numerous protocols to comply with new requirements and show the public that it is safe to use them. Bars, restaurants, and entertainment venues in particular will need to thread the needle between maintaining social distancing and continuing to provide an outstanding customer experience.

Using Mediation to Modify Policies and Procedures and Resolve Disputes

Solving the dilemmas presented by doing business post-COVID-19 will not be an easy task for most organizations. We are in uncharted waters, and there is a lot of uncertainty ahead. There are also sure to be disputes along the way among stakeholders about which direction to go and how best to deploy their resources.

One of the best ways to resolve these issues is through mediation. Mediation has been used very effectively for many years to set up operating agreements, deal with conflicts between partners, employees, or both, and to revise business plans and operating agreements when it makes sense to do so.

Mediation sessions are facilitated by a professional mediator from outside the organization who has no vested interest in the outcome of the proceeding. By receiving an outside perspective, stakeholders often have access to solutions that they may not have been aware of and/or may not have considered because they are too close to the situation. 

Now more than ever, businesses that are adjusting their models for COVID-19 need to look for creative solutions that help minimize risk, solve ongoing disputes, and give the organization the flexibility it needs to adapt during this time. Mediation can help accomplish all of these and more, making it one of the best investments an organization can make to help them successfully adapt to a post-pandemic world.

AMS is Here for You

As we all look to adjust to the changes that have been caused by COVID-19, AMS is open and ready to serve your needs. We offer virtual mediation sessions that can be conducted from anywhere you have a telephone or high-speed internet connection, and we have extended our hours during this time to help accommodate schedule disruptions brought about by the coronavirus. 

We offer free initial consultations, and we are here for you whenever you are ready to get started. Message us online or contact us by phone to schedule your free consultation. 

Resolving Business Disputes Arising from the Coronavirus (COVID-19) Crisis

Resolving Business Disputes Arising from the Coronavirus (COVID-19) Crisis

The coronavirus pandemic has killed tens of thousands of Americans and disrupted every area of our society. In the business community, disruption is the “new normal”, and it is likely to be this way for quite some time. 

Nonessential businesses have been forced to temporarily close until we get through the worst of this crisis, and some of those that remain open have seen a spike in business if they sell essential supplies or provide essential services. Whatever industry you are in, there is no business that has not been impacted in some way by COVID-19.

One of numerous things we have realized (or had to pay more attention to) is just how interconnected our economy is. There is a massive supply chain with stakeholders at each link all relying on each other to maintain their viability. And when one part of the supply chain is disrupted, everyone else in the chain is affected.

Take, for example, the restaurant business. When a restaurant that had every expectation of being open and fully operational for the foreseeable future is forced to close, they suddenly have to cancel orders from food suppliers, who in turn have to cancel orders from farmers or wherever they are sourcing their food from. The same holds true for drinks, which often come from vendors who refill their soda machines.

A closed restaurant will also have to furlough their staff, putting countless employees out of work. They may also have a cooler full of food that will either spoil or they will have to give away unless they are able to quickly adapt their model to provide takeout and delivery service. 

These financial challenges will make it difficult to pay rent or mortgage payments if they own the building, as well as utilities and other monthly obligations. Consequently, those who count on receiving those payments will take a financial hit. Unfortunately, business interruption insurance policies did not account for a public health emergency like COVID-19, so most business owners are finding out that their insurer is not going to cover them for this pandemic.

How to Resolve COVID-19-Related Business Disputes

Massive disruptions to the normal flow of business have created unprecedented challenges for owners and managers to deal with. In many cases, it is simply impossible to meet contractual obligations from agreements that were signed long before anyone ever imagined that this type of crisis would arise. This has resulted in numerous contract disputes among parties who regularly do business together. 

For those involved in a business dispute, legal action is one possible option. But is this really a good way to handle issues that were created by COVID-19? Sure, you might have an ironclad contract and solid legal standing to compel the other party to pay, but is it really a good idea to bring them to court?

Even if the court rules in your favor and you win a monetary judgment for breach of contract, for example, it may not be too easy to collect what you are owed under these circumstances. A business that is closed or operating at a fraction of full capacity is not likely to have ample financial resources on hand to satisfy a legal judgment.

In addition to financial considerations, you need to also take into account the business relationship you have with the other party. If you have a long-standing relationship with someone and they have always fulfilled their contractual obligations in the past, it would most likely be much better for everyone if you try to work with them during this difficult time. And this is where business mediation can be very helpful.

Whether it is a contractual dispute, a dispute over insurance coverage, a dispute over a canceled or rescheduled project, complications from a supply chain disruption, or any other business relationship challenge, mediation can provide a format to resolve the dispute amicably. 

With the guidance of a neutral, third-party mediator, mediation participants meet to discuss the issues at hand and work together to come up with a peaceable and practical resolution. The process is entirely voluntary, and no agreement can be valid unless all parties sign onto it. When the process is successful and a resolution is agreed to, participants are able to avoid costly and protracted litigation while preserving important business relationships that will be vital for their success long after the COVID-19 crisis is behind us. 

AMS is Here When you Need Us

If you are involved in any type of business dispute arising from the coronavirus pandemic, AMS is here to help. Our business mediator Carmela DeNicola has extensive experience working with organizations of all types and sizes, and she has an in-depth understanding of how businesses operate, the challenges they face, and the best ways to resolve conflicts that may arise. AMS has also provided virtual mediation through teleconferencing and videoconferencing for many years now, and we offer remote sessions and extended hours to help accommodate schedule disruptions that have been caused by COVID-19.

Contact us by phone or email for your free consultation to discuss your needs. We look forward to serving you!

Using Mediation for Family Business Disputes

Using Mediation for Family Business Disputes

Being in business with family members involves some unique dynamics that are not present with other types of business arrangements. Sometimes, issues that are totally unrelated to the business can become disruptive, such as personal/relational conflicts, and some of these may go back several years or even decades. 

During the COVID-19 crisis, many family members have been cooped up together for an extended period of time, causing many disputes that may have been simmering underneath the surface to boil over. And in some cases, the family business has also had to close temporarily, adding more stress to the situation. 

Family business disputes that are triggered by issues that blow up during the heat of the moment can cause long-term damage, possibly even leading to the closure of the business. And oftentimes, it is difficult for family members who are so close to the situation to resolve these matters among themselves. Unfortunately, the emotions and stress created by the unprecedented times we are living in could cause the owners of a family business to call it quits, even though they might still have a viable business that could continue on and be passed down to future generations.

How Mediation Can Help Family-Owned Businesses that are Facing Difficult Times

Whether it is a conflict between owners that poses an existential threat to the family business or difficulty figuring out how to navigate the uncharted waters ahead as we look forward to the end of the coronavirus pandemic, owners can benefit greatly by bringing in an outside perspective. 

A mediator, for example, can help resolve disputes between owners, and they can also help with issues the business may have with outside parties; such as suppliers, vendors, lessors, or other associates for which they may need to renegotiate their existing agreements. Mediators can also help create a more formal operating agreement for the business, one which many family businesses have realized that they need since COVID-19 started. 

Here are some of the advantages that mediation offers for family businesses with issues that need to be resolved:

  • Affordability: Mediation is cost-effective not only as an alternative to bringing a dispute to court, but also as a preventative measure to keep major disputes from arising in the first place. In most cases, business owners can settle important issues in just a few sessions or less, saving them untold amounts of time and money.
  • Direct Participant Involvement: The mediation process is entirely voluntary, and no agreement can be valid unless all participants agree. Although the mediator facilitates the sessions, the participants are the ones that ultimately decide how the issues are resolved. This allows participants to take more ownership of whatever is agreed upon, making them more likely to adhere to it.
  • Confidentiality: Mediation sessions are private and confidential, and everything that is discussed stays between the participants and the mediator. This allows participants to speak more freely without any concern that what is said will become part of a public record.
  • Flexible Scheduling: With mediation, you do not have to worry about any court schedule, which is of particular concern lately with the courts being closed for all but emergency proceedings. Sessions can be conducted even while the COVID-19 restrictions are still in place, and they can be scheduled at whatever time is most convenient for participants.
  • Contactless Remote Sessions: Mediation can be conducted while adhering to social distancing guidelines. As long as you have a telephone or internet connection, business owners can participate in virtual mediation sessions from any physical location.

At AMS, we hope that family businesses will consider mediation as an option to resolve disputes and other issues, whether you use us or someone else. However, one major benefit you will receive with us is our first-hand experience working with businesses of all types and sizes. 

Our business mediator Carmela DeNicola has worked in corporate America for several decades, and she also has many years of experience operating her own small business. She helped many businesses get back on their feet following the Great Recession of 2008, and she knows what it takes to recover from a crisis like the one many family businesses are currently facing.

As our country struggles to work its way through the coronavirus pandemic, we have made it easier than ever for clients to access our services. We have provided virtual mediation via teleconferencing or videoconferencing for several years now, and we are currently offering extended hours to help accommodate schedule changes that have occurred because of COVID-19. Our initial consultations are free, and we available whenever you are ready to get started. 

Contact us by phone or email for your free consultation. We look forward to serving you!