COVID-19: A business tenancy update

The situation surrounding the current outbreak of COVID-19 or Coronavirus continues to develop and more measures are being introduced to encourage social distancing including provisions for the closure of some businesses. There is still however some uncertainty from members of the business community over the exact effects of these measures and doubt has been created by the speed of the changes being made.

Every business no matter the size will be concerned at this time over their ability to continue trading in these unprecedented conditions. The proposed Coronavirus Bill includes clauses intended to have the effect of easing the pressure on business tenants.

At present the Coronavirus Bill is making its way through Parliament. The Bill, amongst many other provisions, deals with suspension of the powers of commercial landlords to forfeit property from their tenants providing that the tenancy is a business tenancy within the meaning of Part 2 of the Landlord and Tenant Act 1954. This will effectively mean that the tenant is at no risk of forfeiture of the premises by the landlord for rent arrears. This will apply during what is referred to as the ‘relevant period’ and at present this is proposed to last up to the 30th June 2020 although additional powers are available to extend this period should the Government require it.

It is important to note that this does not mean that the landlord has waived its right to require that rental payments are made in full. Landlords and tenants will therefore have to discuss how to deal with the situation for their individual circumstances. There are many possible scenarios- these could include agreeing on a rent-free period; paying a reduced rent; or simply suspending the rent until the crisis ends, with repayments of the arrears being spread over a period of time. Dialogue and co-operation is key and it is to be hoped that all parties will act in a constructive manner.
For the purposes of the Act rent includes any sum payable under the business tenancy and can therefore be taken to include service charges, insurance rent or other payments which the tenant is required to make. It remains to be seen how long these provisions would remain in place once enacted. This Act is not yet in force and the final form is yet to be confirmed but the above information is likely to be accurate in the absence of new policy announcements.

At BTMK we act for both landlords and tenants and we will be able to help with any questions you have concerning your situation or any other questions you may have regarding your business or lease. We are ready and able to assist with any negotiations that you may need to have with your landlord or tenant and our expert team can advise on the best way forward for your business.

At this time we are offering an informal business advisory service for businesses of all sizes. If you need some emergency advice, and it’s something we can do quickly, we’ll help you with it for free. A hint or a tip or a quick document we can supply, we’re here to help. We know you all have so many questions so feel free to send them to [email protected] or call 01702 238504 and we’ll respond by the end of the day or sooner if we can.

If we can’t help under this scheme, we’ll tell you straightaway. Until then it’s free until we tell you it’s not. This is our small act of kindness, to help the business community through these unprecedented times.

BTMK – Lawyers for Life. Tel. 01702 238504 (this scheme only) /[email protected]/

This article is provided for information only and does not constitute legal advice, please contact us with any specific questions you may have.

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