Questions Regarding Commercial Tenants
Commercial Tenants
As the coronavirus emergency continues clients have raised issues with me concerning their commercial tenants these are some of the questions that have arisen.
My tenants say they can’t pay the rent
Am I obliged to agree a “rent holiday”?
The emergency legislation has restricted the landlord’s right to take action if their tenant doesn’t or can’t pay the rent but has not changed either party’s contractual obligations so the rent is still due and payable as per the lease.
This means landlords are not obliged to agree any reduction or waiver of the rent and it will continue to accrue.
After 30 June 2020, unless the emergency period is extended, landlords will have the usual rights to end the lease for non-payment of rent if they wish.
During the emergency period there appears to be nothing to stop landlords taking action to recover the rent as a debt rather than regaining possession of the property. However, landlords may need to be pragmatic at this difficult time and think about the pros and cons of having the tenant in the property, and hopefully paying rent, after the emergency is over rather than being forced into insolvency.
If a landlord is considering any agreement with their tenant they should be careful about the terms of any agreement – for example, is the rent being waived or just a repayment period agreed?
If in doubt take legal advice on the terms of an agreement.
As a landlord am I still responsible for cleaning of common parts of buildings?
Including health and safety of the building – and can my tenant withhold rent if I cannot provide services?
As mentioned above the emergency legislation does not change the legal obligations in the lease and this applies to both the landlord and the tenant.
These obligations are set out in the lease itself and this is always the first place to look.
It is unlikely there will be anything in the lease which will allow the tenant to withhold rent if services are not provided – the lease will normally say the rent must be paid without deduction or set-off – although this doesn’t prevent the tenant bring a separate claim against the landlord for a breach of the lease.
The landlord should also check the lease to see what its obligations are to provide services. There may be wording that allows the landlord to suspend services if, for example, circumstances are beyond its control.
The landlord’s obligations under health and safety law continue during the emergency and you may want to take specialist advice on what steps you should be taking to protect your tenants and visitors to your premises during the emergency.
Disputes Questions Regarding Residential TenantsHow Kerseys Can Help
If you require any advice or assistant, please do not hesitate to contact me at [email protected] or telephone me on 01473 407147 where I will be happy to help.
