What Would You Do: If It’s Mandatory For A Salon To Close, Do You Still Charge Booth Rent?
If It’s Mandatory For A Salon To Close, Is Booth Rent Still Charged?
By now, many nonessential businesses in the U.S. have been ordered to close for the foreseeable future as a result of the coronavirus. If it’s mandatory for a salon to close, should booth renters still be charged for rent? We posted the question in our BTC Forum and on our IG and the good news is that you have options!
Here’s the TL;DR:
After sifting through hundreds of responses, the short answer is this: There is no definitive answer. This situation will come down to what you and your landlord, or you and your salon owner, decide to do.
- Salon owners: Talk to your landlord about your payment options in terms of rent, waive rent for your team if you can and cut unnecessary costs where possible.
- Booth renters: Start talking to your salon owners about your options and check your contracts to see what implications there are.
Keep scrolling to learn more about these options, plus see what advice salon owners and booth renters had to share!
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Salon Owners: 3 Things To Consider
1. Talk To Your Landlord About A Plan Of Some Kind
If you rent a building, now is the time to set up a plan with your landlord. They may not be able to totally waive rental fees BUT they may be willing to either extend the rent due date or come up with some sort of deferment plan:
- “I have reached out to my commercial landlord to pay ¼ of the rent while we are shut down. The goal is to ease the burden on everyone and to keep paying at least partially to keep everyone and everything going.” – Sarah Jane DiGregorio
- “Just like mortgage and my rent, I was able to defer for April…I worked a deal with my landlord where I would break the month over 12 months.” – Salongo
“I’m a salon suite owner and yes, we have to pay, but if we can’t due to being closed they are adding it to the end of our contract.” – Leah’s Beautique
- “The owner of the suites leases the building, and they are not being given a break on their payments. They have suspended our rent payments for one week, and I honestly did not even expect that.” – Nikki Bloom
“Our salon owner has offered to extend our due date to help us.” – Erica Johnson
2. Waive Booth Rent All Together (If You Can)
We know not every salon owner is in a position to pause rental fees for each stylist but it would be a huge relief to them if you are able. If not, there are other ways to ease some of the pressure. Consider giving them a week or two of free rent or have them pay half now with a payment plan to pay the rest later:
“I’m not charging my people rent…For me, I have money saved—not necessarily for a pandemic but I don’t want to lose my renters here. So I’m not going to take my frustration out on my renters.” – Gina Bianca
- “I have been trying to come up with ways to alleviate the stress of rent on my independent contractors while still being able to stay afloat. Here are some of my ideas so far: 1. If you offer your renters a ‘free week’ of rent per year, have them use it now. 2. Depending on how long we are forced to be closed, instead of asking for back pay on rent upfront, I thought they could ‘repay’ by selling retail and using their commission as a form of payment. This way we can also help our retail suppliers (and reps) with a boost in sales after everything goes back to normal.” – Liz Bridge
“I ran the numbers and asked for half rent now and determined that we could work out a payment plan for the other half when we come back. I also suggested that they use their free weeks. As of now, the landlord of my building is offering me nothing in the way of a break…I do know that even this may not be feasible for them should this situation last longer than we hope and I will speak with them again and rework our plan. I also suggested that they file for unemployment immediately and they all have.” – Jen
- “I have owned my own salon for 10 years and have saved for a rainy day. My stylists can’t draw unemployment, so I won’t be collecting rent but I’m fortunate to be in a position to do so. If it was my first year, or even first five years, in business I wouldn’t have been able to…But I consider my stylists family and I am happy that I am in a position to offer them even the tiniest peace of mind.” – Heather Ray Smith
- “We normally charge $100 a week. We told our renters that if they don’t work any at all in a weeks period, they don’t have to pay. If they work two days it’s $50 and anything over that is $100. We told them we would see where we were at by the end of next Friday and extend it if needed.” – Jasey Starr
- “I am not charging rental as long as she and I can’t work. I signed the lease to the building, not her, so it’s my rent to pay. I filed for unemployment and hope I get it (seems I will).” – Leslee Toy
- “Unfortunately, I had to make a decision that wasn’t easy but I did. I spoke with all the studio renters and explained that they would still have to pay their weekly rent but our relief plan would be as follows:
- If any contractual free week rent is due they can utilize it.
- Pay what you can and what works for you financially. If that’s nothing we will figure it out.
- Once this blows over we can each sit down on a one-on-one basis and decide what is feasible for the individual to add to the future rent as they start working again.” – Jennifer Burris
3. Cut Costs Where You Can
Because your salon is bringing in less money than usual, it’s crucial to evaluate where your money goes beyond rent and cutting costs where possible. Turn the heat or AC down (or off completely), make sure all electrical is turned off and pause things like supplies deliveries. That way, the money you have saved can go toward rent and utilities:
- “I went through and cut out all unnecessary costs (cleaning services, supplies, retail product) and only added up the absolutely necessary bills that need to be payed to keep the salon afloat. After getting that number, I went through and averaged out each stylist’s rent check to me for each month and then figured up the percentage that each stylist contributes to the total average rental income each month. Basically I was able to cut everyone’s rent payment in half.” – Olivia Liberti
- “I will go in this weekend and turn the heat waaaaay down, turn off all electrical I can and hope for the best.” – Beth Richard Jessee
Editor’s Note: Do you own the building your salon is in, and you don’t think you can pay the mortgage? Many financial lenders have resources and options available if you are unable to make mortgage payments. We recommend reaching out to your individual lender for your best option.
Booth Renters: Here’s What You Can Do
Talk to Your Salon Owner & Check Your Contracts
We know having no income right now is terrifying, which is why you should talk to your salon owner immediately about your concerns and your options in terms of making rent on time. They should be more than willing to work something out with you. Then, take some time to review your contracts. Depending on the state you live in, there may be some implications:
Editor’s Note: The best move is to consult an attorney. We are not responsible for the accuracy of legal claims made in our forums or social media, so do your research!
“My contract states that I have to be provided with a station to work at in order to be charged rent…Our stations are not available right now for us to use so legally I don’t think they can charge us for rent, but it’s very unfortunate to everyone right now and I want to try and help my salon owner as much as possible.” – Nesie Campbell
“I live in Colorado Springs and they made it a law that you can’t get evicted for not paying rent for the next three months. If you work for someone who is still charging you rent, I would take the next 30 days to find a new place to work.” – Elli Downing
“Have to check with your lawyer. I would think legally you cannot charge renters. It’s like charging someone to rent an apartment or an office and saying, ‘By the way, you can’t use it.’ Salon owners, look at your insurance—there could be something like a loss of income clause in the policy.” – Scott Mack
“If you are mandated to close, you have legal coverage to not be evicted for non-payment of rent. If you are not mandated to close, you are still on the hook.” – Katie Yancey Pfitzer