Home » Commercial Services » Rental Payments During COVID-19

Rental payments and other property outgoings may be a significant cause of concern during the current pandemic. Whether it is landlords who are being asked to reduce or postpone rental payments, or tenants who are making such requests in an attempt to bring stability to their business, advice should be sought before entering into any such arrangements.

Ways that we can help you

Clearly, the usual position is that the rent payment should be made on or before the date required by the lease. If that does not happen then interest can accrue on the balance and if it still remains outstanding for a certain period of time set out in your lease (often 14 or 21 days) then the lease can be forfeited (terminated by entry of the landlord) without the need for court action.

However, because of the huge impact Covid-19 is having on businesses, the government have announced measures whereby leases cannot be forfeited (terminated) for non-payment of rent (including any sums due under the lease, not just annual rent) until 30 June 2020 at the earliest. Non-payment of rent may however lead to other issues around winding up, debt claims or instructing bailiffs to recover goods for example so it may be worth instructing us for full advice. As such, we would advise against any tenant simply not paying rent or paying a reduced amount without agreement.

The government is advising that proactive and amicable methods should be used where rent payments are going to be an issue. As a result, you may wish to try to agree a change to when the next instalment of rent is paid, or implement some other terms that may assist in the current situation. In all circumstances I would suggest there are accurately recorded by solicitors.

Unfortunately, insurance is unlikely to be of much use in the circumstances. We can review the lease for you and you may wish to speak to your insurance broker, but it is unlikely that, for example, closures of stores due to the virus (and the wider payment issues) will be covered by the lease.

Leases may alternatively contain a ‘force majeure’ clause. This could postpone responsibilities whilst it is impossible to operate or could end the lease. Whether this is the case will depend on the exact wording in your lease and whether the business has been forced to close.

Methods for providing your advice

There are a number of ways that we can provide the advice that you require, and our team are more than happy to accommodate any method that suits you best. Examples of these methods include the following:

• Virtual meetings – We are set up to host meetings on Zoom, Skype and Microsoft Teams. This method is often a good way to provide face-to-face contact with you, and allows you to ask any questions of our team as and when the need arises. It is always good to put a name to a face, and we find this is the an effective way of allaying any fears you may have as a practice owner.
• Telephone conferences – This method is the most used, as it allows multiple members of your team to be present at the meetings without having to rely on sometimes unreliable internet connections! We can also have multiple members of our own team available, so that specialist advice on a number of aspects can be present in that one meeting
• Email or telephone – All members of our dental team are available by email or telephone. All contact details of each member of our team is available on our website (https://rudlings-wakelam.com/professional-services-a-advice/) and links to their LinkedIn profiles are available should you require any further information.

We understand the difficulty of managing your practice in these constantly changing times, and keeping up to date with the new legislations and measures that are being implemented. We want you to understand that we are here to help should you need any advice.

I should emphasise the above is very generic and will apply differently depending on the contents of your lease.

Please do let me know if you wish me to formally review you lease in view of the circumstances or potentially draft an agreement for the revised rental terms and we can go from there.

Please stay safe. Please stay protected.

Jason Sidney.