We are living though unprecedented times and the effects of Covid-19 are far reaching both personally and commercially.
Although the Coronavirus Act 2020 has introduced limited protections to tenants from possession proceedings, the statutory restrictions imposed during lockdown do not prevent rents falling due under a commercial lease.
There is always a possibility that such a pandemic was provided for when the lease was drafted – so, carefully review the terms of the lease. Also review any insurance policies which may provide cover in connection with losses such as rent and/or revenue, particularly if you opted for add-ons/extensions to your insurance cover.
It is important for landlords and tenants to communicate and do what they can to support each other. By negotiating and agreeing a way toward “business as usual” hopefully, both landlords and tenants can avoid insolvency and/or reputational damage.
It is often possible to agree a rent deferral or rent holiday. Alternatively, perhaps consider agreeing that a tenant pay a reduced rent plus a % of income, which gives both parties an incentive in the business succeeding.
It is vital that any agreement is carefully recorded and covers all the terms agreed (and those that you may not have thought of, which is where we can help!). In doing so, hopefully, disputes can be avoided down the line.
And finally, of course,
Please do not hesitate to contact Rebecca Turnbull-Simpson, Nigel Targett or Oliver Maxwell-Jones who specialise in commercial property matters. We are “open for business” and will be happy to assist. Although our offices are closed in line with Government guidance, Coole Bevis LLP continues to provide a full legal service and we are working remotely.