Commercial lease update

The Government has now announced a three month moratorium on commercial tenancy evictions in light of the devastating effect the coronavirus is having on so many businesses.

However the underlying position at present is unclear.  This is understandable given the scale of the crisis and that managing the crisis and reducing fatalities has to be the main priority.

We await the detail but looking at what has been released so far the moratorium relates to businesses who cannot pay their March quarter rent due to the coronavirus.  If say a tenant was already in arrears but has gone further in arrears due to the virus what happens then?  Hopefully further guidance will follow.

Any arrears remain due and the Government is encouraging landlords and tenants to negotiate directly with each other and reach a solution as to how the arrears will be repaid.  There are different ways this can be achieved but a side agreement would seem a sensible way of dealing with it.

The terms of any agreement will vary based on the wording of the lease itself and the circumstances of the landlord and tenant.

As I have said previously most landlords and tenants want the same thing and there will need to be some give and take. 

It is an incredibly worrying time for anyone in business.  Please do contact me if you are worried about your own position.