As things continue to develop, the unemployment rate will likely increase, making it difficult for people to pay critical bills like mortgage payments. While domain name lease payments and domain name payment plans are probably not considered “critical bills,” I think people will find deal partners asking to restructure payment plans or asking to put them on hold. People may also opt to forego lease payments or payment plan payments. I am interested in knowing how domain investors will respond.
The way I see it, domain investors who have ongoing leases or payment plans will have three options if the counter party can not pay on time or asks for some sort of lease forgiveness:
- End the lease and repossess the domain name.
- Give the other party additional time to make expected payments (extend default period)
- Change the lease or payment plan terms.
Everyone has a different approach to how they might handle a situation like this, and there are many different factors at play. For instance, on a deal where the investor and the counter party has some sort of relationship, there might be more willingness to extend terms or give the other party some leeway. On deals done on a platform like Dan.com where there was little to no interaction between parties, deals might simply be allowed to expire.
Domain investors have their own bills to pay, so allowing deals to expire could be helpful if the domain name could be sold or leased to another party. On the flip side, being generous and giving the other party more time to pay might build some goodwill and ensure the payments continue to be made in the future. I would imagine people have different philosophies about this depending on their own individual circumstances.
It would be great to get a sense of how domain investors intend to handle lease payments or payment plans if the counter party indicates difficulty paying. What is your approach to this going to be and how will you manage? Separately, I think it would be interesting to hear about whether others are seeing more defaults or payment change requests.