Considering Alterations to Rent Liabilities

In a difficult economic climate, landlords are sometimes willing to take steps to accommodate their tenants’ financial difficulties, e.g. allowing the payment of quarterly rents on a monthly basis, rent concessions etc.

Such arrangements should always be documented and signed by both parties, as well as the guarantor. There are a number of issues to consider when documenting such arrangements, including:

• whether the landlord wishes to charge interest;
• in what circumstances the arrangement may be terminated;
• the implications of a tenant’s subsequent insolvency;
• (in the case of a rent concession) whether there will be any right to resurrect the entitlement to this missing rent;
• the implications of the arrangement on any rent review – for this or other nearby premises; and
• the risk of releasing any guarantor.