The impact of Covid-19 on commercial leases will present challenges for landlords and tenants alike, the big issues being the ongoing payment of rent and provision of services.
Landlords and tenants should work together and agree concessionary arrangements to help tenant’s businesses survive and to keep premises occupied.
The Government has introduced measures which will protect commercial tenants from forfeiture due to non-payment of rent. According to the British Property Federation, some tenants are interpreting these measures as an instruction not to pay rent but tenants need to be aware that rent is still payable and interest will accrue and will be payable at the end of the ‘relevant period’.
Whether you are a landlord or a tenant, entering into a concessionary arrangement to temporarily vary the terms of your lease could be a viable solution for both parties. Whether you want a rent deferment, a change in the way rent is paid i.e. quarterly to monthly/in advance to in arrears or whether there should be a temporary reduction in rent to reduce the amount a tenant will ultimately be left owing. These arrangements could be tailored to suit both parties, for example, in exchange for a rent free period, an additional rent review could be negotiated to give the landlord some opportunity to recoup some of their losses at a later date.
A short term extension is also worth considering if you are a party to a lease which is approaching the end of the term. There are important points for both parties to consider in this situation and any agreement needs to be in writing to avoid any potential disputes in the future.
Any arrangement should be formally documented and there are many important factors to consider. Here at Parfitt Cresswell we have a team of legal experts who can advise you on all aspects and, in most circumstances, could do this for a fixed fee which we will agree with you at the outset.
If you require legal assistance, we are offering a number of complimentary telephone/video conference consultations for the month of April. To find out more and reserve your spot to speak with one of our legal experts call 0800 999 4437 or email firstname.lastname@example.org today.