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Joanna Bryan

Chartered Legal Executive - Uckfield

Coronavirus (COVID-19) and your commercial property lease

Both tenants and landlords of commercial properties are facing unique circumstances and challenges caused by the ongoing Covid-19 pandemic.

Tenants must look for help through commercial property rates relief as well as checking their business insurance policies to see if they can cover their rent by claiming for business interruption due to pandemic. If not, some landlords may be willing to allow them a rent free period or a rent deferral.

Landlords of office and mixed-use buildings will be looking to see if they can charge for additional deep cleaning under their service charge provisions. Where appropriate, they will also be checking to see if their lender will allow them a mortgage holiday to off-set the potential loss of rent they may well incur. They should also check their buildings insurance to see if they can claim for any loss of rent due to pandemic.

In addition, the following items should be checked in your lease:-

  • Tenants may wish to review break clauses to see if they can determine the lease early
  • If you no longer wish to renew your lease check what notice you must give
  • Check rent suspension provisions activated where the property cannot be used due to an insured or uninsured risk.
  • Review force majeure clauses to see if they apply and will allow for suspension of rent
  • Watch out for breaches of “Keep Open” clauses and interruption of rights over common areas due to new Government rules on social distancing and shop closures
  • Be aware that the Coronavirus Act 2020 makes it illegal for landlords to re-enter or forfeit business tenancies for non-payment of rent until 30th June 2020.

If you are a tenant or a landlord and would like us to advise you on how the coronavirus will impact your rights and obligations under your lease, or you need urgent advice on bringing into force temporary adjustments please don’t hesitate to contact Jo Bryan directly on 01825 744426 or joannabryan@rixandkay.co.uk.

 

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