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What Does the Coronavirus Act Mean for Commercial Landlords and Tenants?

on Thursday, 26 March 2020.

As all commercial landlord and tenants know today is a quarter day and the first one (and hopefully the last) spent in lock down. The Coronavirus Act has now passed on to the statute books.

The government announced a few days ago that this would ensure that commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.

What does this really mean for landlords and tenants and what other issues should those dealing with commercial premises be considering?

The Coronavirus Act does not require a landlord to forgo their rent entirely. It simply removes one of the landlord's remedies (repossession) if the rent is not paid. Where difficulties arise, most sensible landlords and tenants will be dealing with the March quarter rent by entering into a rent concession agreement (to agree to the rent being paid late or monthly or to it being reduced).

It is important to make sure that these agreements are correctly drafted so that the landlord does not lose remedies later on or inadvertently vary the lease. From a tenant's perspective you will want to make sure that the obligations are clear and that they support any application for a grant from the government. 


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There are many things to think about at this difficult time but if you are involved with commercial property as a landlord or a tenant do remember to consider:

  • What obligations do you have under your insurance policy if the building is left empty?

  • Is the property left secure? We are already aware of trespassers accessing open land and causing damage to property in city centres.

  • Do you have any upcoming deadlines to consider including the expiry of your lease, the need to serve a break notice (or to comply with break conditions for break notices already served) and the need to respond to notices served on you? Consider these early on - you will need to get a plan in place.

  • Rates - have you applied for any rates relief that you are entitled to?

  • Have you thought about how best to mitigate service charge liability? What are the parties' obligations under the lease?

  • How will a landlord deal with a situation if the tenant validly needs to access the building (perhaps because their employees are key workers) but the landlord wants to close down the building?

If you have any questions regarding property issues during the coronavirus pandemic, please contact Michelle Bendall in our Property Litigation team on 0117 314 5326, or complete the form below.

 

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