Covid-19: Wondering About Your Next Move, as a Commercial Tenant or Landlord?

We are keen to support commercial landlords and tenants who may be unsure about their rights and responsibilities, at this challenging time.

Here are some of the key points you should be aware of:

• The relationship between the landlord and the tenant, and those rights and responsibilities, will be governed by the terms of the lease the parties have signed
• Neither landlord nor tenant can be forced to re-negotiate these terms once the lease has been signed
• Of course, each lease is different and the advice we would give to tenants and landlord varies depending on the lease terms
• It is unlikely that the parties will have grounds to terminate the lease due to events which are outside the control of either party
• Some leases have rent suspension clauses – often for an event like fire, flood or physical damage. The majority of leases will not have a rent suspension provision for the current pandemic scenario
• Most leases specify the rent payable. This in most cases will need to be paid but there are some exceptions. For example some leases include rents that are linked to a tenant’s turnover and those tenants will pay less during a downturn

In most cases landlords and tenants will need to work together to find a way through what is, clearly, an unprecedented crisis.  Landlords may voluntarily agree a rent-free period or a reduced rent, with provision for the unpaid element to be paid over a certain period of time. There may be some insurance available under a landlord or tenant policy.

If premises are forced to close – perhaps because of Government guidance - it could be argued that the lease has been frustrated, so it could, in this instance, be argued the lease terms cannot be fulfilled.  

However, this is a difficult argument to bring and it may not succeed. And, of course, not all tenants would want to end their leases, since they will want to continue operating their business once Covid-19 is a distant memory.

JCP’s expert Property team is always on hand to offer tailored advice to suit your individual circumstances. Please contact Sarah Davies, JCP Director and Head of Property Litigation for further support on: 01792 529640 or sarah.davies@jcpsolicitors.co.uk.

For further advice, please contact our specialist Property Litigation Solicitors in:

• Swansea: 01792 773773
• Cardiff: 02920 225472
• Carmarthen: 01267 234022
• Caerphilly: 02920 860628
• Cowbridge: 01446 771742
• Haverfordwest: 01437 764723
• Fishguard: 01348 873671

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