COVID-19: The impact on landlords and tenants as we approach the March quarter day...
As offices adjust their working arrangements in light of the recent coronavirus outbreak, it is becoming clear which businesses will be impacted the most as the virus begins to move through the UK.
Laura Ashley has become the first high-profile retailer to fall into administration, blaming Covid-19 as having an immediate and significant impact on trading, with those in the hospitality, aviation and entertainment sectors warning of imminent collapse without government help in light of unprecedented pressures they are facing.
As we approach the quarter day, many tenants will be considering their options if they cannot afford to pay the rent due to business interruption as a result of Covid-19. Tenants are encouraged to open a dialogue on this issue early with a view to agree a rent concession such as a variation to rent payment dates (i.e monthly as opposed to quarterly). Landlords are not obliged to agree any variation of the lease on these issues, and if they refuse, a tenant may be at risk of a landlord taking action against them should they fail to pay the rent as agreed. This is subject to any new legislation which may be introduced restricting a landlord's ability to seek possession of commercial property during the coronavirus outbreak.
However, landlords should be mindful of regaining possession of property in the current climate, unless they are able to re-let the premises. Liability for business rates will revert to the landlord (unless any exemptions apply). If a landlord decides to forfeit, it will also need to consider practical issues (such as securing the property or dealing with the former tenant's goods), should they proceed in this way. Opening a dialogue is an important step for landlords and tenants at this time.
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H&M the latest to call for rent holiday as coronavirus crisis deepens
