Today small business owners in McKinney, Texas are not only trying to keep their businesses alive after having to temporarily close as a result of the coronavirus shutdown, but now they’re fighting to get their property and equipment back.
After asking their landlord to work with them on rent this month due to no revenue, they were locked out. The City of McKinney passed a “stay-at-home” order March 26.
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Laura Tye Photography and two other businesses are at the center of this dispute.
All located on the Square in the same Historic Downtown McKinney building, they were surprised to discover Friday evening that their landlord had locked them out after they expressed they would need to use SBA economic disaster funds to pay April rent.
They have not been able to legally operate their business for two weeks due to the stay-at-home order in place.
“We have been locked out since the evening of [April 3] and rent is not even due…it’s not even late until tomorrow,” Laura Tye said in a Facebook video dated April 5. “As non-essential business, we all approached our landlord nicely saying ‘Hey, we’ve been out of work for three weeks and we’re going to be out of work for who knows how long. We’re not sure we can pay full rent this month.’ Without even a fair response, we came and found out that he had locked us out of the building.”
Local Businesses Locked Out After Asking Their Landlord To Work With Them On Rent This Month
Tye says she has applied for federal economic disaster funds. The SBA is offering low-interest loans to small businesses and property owners who have suffered an economic loss due to the coronavirus shut down. Up to a $10,000 advance is available to qualifying businesses and is 100% forgivable.
Laura continues, “We were told by some reputable sources that commercial landlords are able to defer their mortgage payments. I asked him about that and he came back with an offer of 20% off for April and May only under the condition if I sign a two year lease with him.”
Laura is concerned about extending her lease another two years. She has no timeline of when she will be able to open her photography studio again due to the coronavirus shut down.
An email sent by the property owner, S Five Partners, to the three Downtown McKinney businesses reads in part, “We are trying to be fair in this tough environment. The fact that you choose to not use the space or that the City does not allow you to use the space is not the fault of the building.” (emphasis added)
S Five Partners released a prepared statement to media which reads, “We have reached accommodation with many tenants. The accommodations include rent relief and rent deferral. We have offered options to this tenant in an effort to accommodate her needs while attempting to cover her portion of our ongoing expenses. However, she has not shown a willingness to discuss options.”
Jim Schwalls lists himself as managing partner of S Five Partners, L.P. on his personal Facebook profile. He is also listed as President and CEO of Jim Schwalls and Associates which is the listed tax agent for this property according to the Collin County Central Appraisal District. According to the Texas State Comptrollers website, S Five Partners’ right to transact business in the State of Texas is currently noted as “forfeited.”
The “accommodations” we were able to independently verify in an email sent to the three business owners in McKinney, Texas did not mention rent deferral at all.
Instead, it contained the following statement by S Five Partners, “Generally if a tenant asks for something and we grant a change from the agreement that was signed by both parties in good faith then we look for something in return. Generally what we are seeking is an extension of the lease. Each of you are in different situation in terms of lease time remaining. Laura’s lease for example expires at the end of August so she is free to name a different rent at that time. As are we.” (emphasis added)
Community Rallies Around Locked Out Small Business Owners In McKinney
The landlord may be kicking these small business owners while they are still down, but the community of McKinney has rallied around Laura Tye Photography and the other locked out businesses by sharing Laura’s video and updates to social media, contacting McKinney Mayor George Fuller, and even doing some of their own sleuthing.
McKinney Mayor George Fuller said in an interview with Fox 4 News, “The best way to recover is businesses stay intact. Businesses need to open their doors the moment they are able to have their doors open,” he continued, “For those that are locking people out and are just not able to do what I’m pleading for, man, let then have their equipment, let them have what’s in there, let them have some fighting chance of survival.”
Mayor Fuller sent the landlord a letter Monday asking him to do all they can to help small businesses survive. The city council will take up the issue Tuesday evening.
As of the publishing of this article, the video Laura Tye posted to her personal Facebook profile has been viewed almost 19,000 times, received over 450 comments, and been shared over 500 times on Facebook and Instagram.
The Facebook business pages for the landlord were quickly removed Sunday evening after support for these local small businesses began to gain traction.
Resources Available To Help Property Owners and Businesses
SBA’s Economic Injury Disaster Loan (EIDL) program makes available low-interest working capital loans of up to $2 million to property owners and small businesses that incur “substantial economic injury” resulting from the COVID-19 crisis.
Additionally, many banks are allowing commercial property owners to defer their loan payments by extending the term length. The substantial economic injury is presumed in most cases for losses incurred during the COVID-19 shut down.
“My Business Has Been Completely Ripped Out From Under Me.”
“My business has been completely ripped out from under me. I have no idea as a newborn photographer (who cannot obviously abide by the six feet rule) when I can be back at work. The thought that [my landlord] would have the audacity to ask me right now to sign a two year lease is mind-boggling in the middle of a global pandemic. He is well aware that I have applied for loans to try to help through this time. My last email to him before being locked out was that I have applied to these loans, and that if I get them, I am happy to put them towards rent. He did not respond–he came and locked me out on the third of the month when I am in good standing. I have always paid on time and I have been here for 20 months,” Laura explained. (emphasis added)
DISCLOSURE: Laura Tye is an editorial writer and photographer with Metroplex Social. When we learned of her plight we chose to share her experience with our readers. Our decision to support a team member has no effect on the facts stated in this article.
Community Rallies Around Locked Out Small Business Owners In McKinney
Small businesses that have been hit hard by the coronavirus shutdown were locked out of their businesses in McKinney, TX over the weekend by their landlord. Now they’re fighting to get their equipment and property back.
Here’s more on Metroplex Social:
- How The CARES Act Helps Families And Businesses Due To COVID-19 Shutdown
- Here’s How Big Your Economic Stimulus Check Will Be
- Here’s Why The CDC Is Recommending Everyone Wear A Face Mask
- How To Make A Face Mask To Help Slow The Spread Of COVID-19
What do you think? Should landlords follow the letter of the law in lease contracts or should they show meaningful compassion during the COVID-19 shutdown? Leave us a comment below.
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Illegal Lock Out. I hope she sues. I bet she is not the only owner in downtown McKinney that has had problems with this management company. Good to know. Guess when looking for space to rent in downtown I better make sure this guy is not the owner/manager. So disheartening I thought most of this kind of bs only went on in the big city.
Moral wrong, Evil, but Jim Schwalls the managing partner of S Five Partners is pure evil. He wants a piece of your ass if he give you smallest break specially if you are a female tenant. The worst of human and the landlords.