Landlord & Tenant FAQ’s about Covid-19

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Covid-19 FAQs

I am a commercial tenant and cannot pay my rent due to the outbreak and Covid-19 and its impact on my business. What should I do?

These are unprecedented and uncertain times and businesses up and down the country will be wondering how they are going to pay their rent. There is some relief as the Government has announced that commercial tenants who cannot pay their rent in the next three months due to COVID-19 will be protected from eviction. This provision is part of the Coronavirus Bill 2020 which received Royal Assent from the Queen on the 25th March 2020. With the March quarter date having fallen on the 25th March, many tenants have already contacted their landlords requesting relief from paying their rent to ease some pressure. Many may have just managed to pay the March quarter but will be thinking ahead to the June quarter rent due. It is worth speaking to your landlord to seek a three to six month extension of time, a rent free period or a reduction in rent. Many landlords may be prepared to consider such requests if it means in the long term their property remains tenanted. Undue pressure from the landlord may in some circumstances lead to businesses folding and leaving the landlord in the position of having an empty property. Most commercial leases require tenants to pay rent on the usual quarter days however depending on your circumstances, it may be worth asking your landlord if you can pay monthly. Whatever is agreed between you and your landlord you must make sure that everything is fully documented to avoid arguments later.

I am a landlord and my tenant is required to pay turnover rent. Given the current pandemic what is my position?

A turnover rent is a rent calculated by reference to the turnover generated at the premises. Obviously in the current circumstances, the turnover of many businesses will be seriously affected and going forward you may receive little or no rent. Even where tenants are not automatically entitled to the benefit of a turnover rent provision such as in the case were turnover rent is based on several months of historic trading, tenants are approaching landlords to seek rent holidays. The government has provided protection to commercial tenants from forfeiture over the next three months and therefore you will be unable to take any action to forfeit the lese for non –payment of rent. The provisions do not waive the obligation to pay rent and they will continue to remain due and can be recovered when the emergency measures end. It is important that as a landlord you continue communicating with your tenant who may be able to take advantage of the numerous measures that the government has announced to assist businesses.

I am a landlord and I was shortly due to exercise a rent review clause in a commercial lease. What should I do?

At this current time, you may want to think carefully before exercising a rent review and putting further pressure on your tenant. If you have an upcoming rent review, it may be preferable to defer the review to another time. This may be possible if the rent review clause contains a provision that “time is not of the essence” which will mean that there is no significant prejudice to a landlord who chooses to defer any rent review. It may also be worth taking a long term approach to the issue. The UK economy will no doubt enter a period of recession even once this pandemic passes and the high street was already under significant pressure from online retailers. You may want to ensure that that in the long term your tenant remains in the property and you are not faced with an empty building. This will mean working with your tenant now and leaving the channels of communication open

Given the Government’s announcement, as the landlord of a building I consider that I must close it? Does this leave me open to claims by my tenants?

As a landlord you have a duty to comply with any health and safety legislation and may now have to close all the common parts of the building. If this results in the tenant being unable to access their premises then they would be a claim against you for breach of quiet enjoyment. However, it is difficult to see how the tenant could show any loss given the circumstances are such as they would be required to close anyway. If, however the building can be kept open then you would at least have to consider additional deep cleaning and whether you can pass the costs of this to the tenants will depend on the service charge provisions in the lease.

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