Help for Commercial Tenants & implications for Landlords
Posted on 2nd April 2020 at 21:00
Now we are a week into businesses being unable to trade commercial landlords and tenants need to talk to each other and have a frank conversation.
Some business won’t be adversely affected by the virus and will be able to keep up the rental payments, others are going to struggle.
Now we are a week into businesses being unable to trade, commercial landlords and tenants need to talk to each other and have open and honest conversations.
Some businesses won’t be adversely affected by the lock down and will be able to keep up the rental payments, others are going to struggle.
The Coronavirus Bill gives commercial tenants some protection if they miss the rent payment up to the 30th June, this may remove the immediate threat that the locks will be changed but it does not remove the liability for the payment for the rent. If the tenant has entered in to the lease in their personal name then implications extend further than loss of their business to their personal assets.
It is also not in the interest of the Landlord for the Tenants business to fail not in any circumstances and now is definitely not the time to have an empty property; even if there is no mortgage on the property there may be a business rates liablity, heating , lighting and security all kick in.
So talk to each other, come to a payment plan and find a solution to make sure that the tenants business is able to survive.
From a practical perspective if as a Landlord you agree a rent reduction or rent free period, my suggestion is that you document this in a letter signed by the landlord and the tenant. Then there is no misunderstanding that the original rent will start again from an agreed date. If the lock down continues you can always do another letter.
This will come in to force when the Coronavirus Bill received Royal Assent. I am sure that this will lead to potential Landlord Tenant disputes, save the time, cost and stress of these disputes and talk to each other now and make sure you document your agreement even if it is an exchange of emails.
This is the extract from gov.uk and the link.
Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.
These measures will mean NO business will automatically forfeit their lease and be forced out of their premises if they miss payment up to 30th June. There is an option for the government to extend this period if needed.
This is not a rental holiday (all commercial tenants will still be liable for the rent) but this measure protects commercial tenants from eviction if they are unable to pay the rent.
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