Commercial property landlords and tenants ‘need to share the pain’

Commercial property landlords and tenants need to work together to ‘share the pain’ to get through the current period.

That is the message from regional law firm Napthens in giving advice for both parties to engage in dialogue and discuss ways through the current challenges.

David Bailey, Partner, Head of Commercial Property Litigation, said: “It’s not in anyone’s interest to take an extreme position, either the landlord or the tenant of a commercial property.

“In most cases it is not appropriate for landlords to pursue every penny of rent when they know a tenant is struggling in the current circumstances. Also, in most cases it is not appropriate for tenants to refuse to pay anything.

“By working together and considering the specific circumstances of the subject property, the landlord, the existence of any support from the landlord’s lender, government financial help available and the tenant’s business, both parties can come through the challenges.

“The pandemic is a game changer for the usual landlord and tenant relationship. The knock-on effects will vary business to business and it is important for landlords and tenants to work in partnership to reach a workable solution until things return to some sort of normality.”

Under the Coronavirus Act 2020 which came into force on March 25, commercial landlords are precluded from forfeiting commercial leases and evicting tenants for non-payment of rent. This measure is in place until June 30 but may be extended.

Further restrictions are about to be introduced which will prevent landlords from winding-up tenant companies for non-payment of rent who have suffered a financial impact as a result of COVID-19.

Latest guidance for commercial property landlords and tenants was the subject of a dedicated webinar staged by Napthens which covered the legal and practical issues for the commercial property industry. For more information on the support available during the coronavirus pandemic, visit the Napthens website.