I have had a number of inquiries about commercial rents from those who are struggling to meet this cost, even if they are in receipt of a business rate grant.
The official government advice on the grant is quite clear that it is “to help meet their ongoing business costs” and not specifically to make any lease rental payments. The government also introduced emergency legislation that prevents landlords from repossessing commercial premises where tenants are unable to pay their rent (and any other sum a tenant is liable to pay under any relevant business tenancy) over the next three months ending 30 June 2020. The moratorium is a general prohibition and applies whether or not the tenant’s failure to pay rent relates to COVID-19. In relation to proceedings already taking place in the courts, they will not be able to order the tenant to give up possession before 30 June 2020. In cases where an order for possession has been made and the date for possession falls before 30 June, the date can and will be extended to fall after 30 June 2020.
It is important to note that although the length of this moratorium may be reviewed and extended, it does not mean the rent is no longer payable and it does not impact the landlord’s ability to charge interest on late payment under other provisions in the lease. It simply means the landlord cannot take forfeiture action during the three-month period for rent arrears. Once the moratorium is over, the landlord may take action to recover the rent arrears. Effectively it is providing tenants more time to come up with the rent in the hope that businesses can protect jobs and stay afloat in the meantime.
In these circumstances, it makes sense for both landlord and tenant to come to a reasonable arrangement so that business operators can make use of the Government support available and put their finances in order prior to the right of forfeiture being restored.
If any business finds itself being asked to pay rent in full by a landlord during this period, please contact me.
