Staples Won’t Pay April Rents

As the business world has come to complete standstill over the coronavirus, office supply chain Staples recently informed landlords across the U.S. that it will NOT pay April rents for any of its stores, even though the locations remain open.

According to sources, commercial landlords are stuck in a tightening vise, forgiving or deferring payments from shuttered tenants while still needing to meet their own mortgage obligations.

Multiple landlords report that Staples reached out within the past 72 hours to inform them of its decision. Staples didn’t propose any sort of deferred payments, nor would it pledge to pay May rents. At the same time, the landlords remain expected to maintain such services as utilities and sanitation.

“They basically told me it was my problem,” one landlord explained. “They’re taking advantage of a crisis — we’re not allowed to do evictions right now and, even if we could, imagine the PR nightmare of kicking out an ‘essential service.”

“I could stop sweeping the parking lot, but I’ve got a supermarket in the same plaza,” adds another landlord. “I also have an Office Depot in a different property, which is Staples’ closest competitor, and they paid their April rent. … Staples as an anchor tenant pays less per square foot than the smaller stores, which we’re working with because their revenue went to zero, but apparently they don’t care at all about those mom-and-pops or the smaller [landlords] that have only one or two anchors.”

Standard commercial property leases do not allow for tenants to stop paying their rent due to the current situation, nor are the tenants typically covered via interruption-of-business insurance. Likewise, commercial landlords remain on the hook for their own debt obligations. But, again, Staples remains open (albeit with slightly shortened hours).

So it’s likely a lot of cases will be going to court over this one. And who’s right? On one hand, the commercial landlords have financial obligations and signed contracts, on the other you have tenants who are losing revenue daily even keeping their stories open for so few people.

Disputes are found EVERYWHERE even during these unprecedented times.  And when those things affect YOU and YOUR business including landlord/tenant matters, contract issues, nuisance ADA claims and even collections, call in the good guy business litigator, Dean Sperling to resolve YOUR matter with YOUR best interests in mind! 

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