News

Landlord’s remedies for breaches of lease in commercial property

breach in commercial property contract

Yes, some might have thought that we should soon be approaching the end of the grace period in the current Covid-19 commercial property world.  But this is now to be extended to 30 September 2020.

The new Code of Practice has been published by the Government, encouraging commercial landlords and tenants to support each other and make “affordable” agreements.  In our previous articles, we have given our suggestions in the same manner.

But, we also understand that things are tough in reality.  We all need to survive, and we may have be proactive.

In a non-Covid situation, the possible remedies available to a commercial landlord for non-payment of rent may be:-

a – Claim for unpaid rent;

a – Withdrawal from rent deposit;

c – Seeking recovery from former tenant/guarantors;

d – Commercial Rent Arrears Recovery* (CRAR);

e – Collect rent from sub-tenant (when CRAR is available);

f – Statutory demand* for rent arrears and winding up petitions*; and

g – Forfeiture*.

In the current Covid-19 situation, however, the options listed (d) to (g) above are NOT available in England and Wales.  According to the new Code of Practice, we would have to wait until after 30 September 2020 for those options to become available.  The Code of Practice is a voluntary code and does not change the underlying law relating to the commercial landlord and tenant matters, but the parties are required to act in accordance with it.

We therefore advise that Landlords and their Tenants consider reaching an achievable and reasonable solution for each other – be it temporary, or for the rest of the lease term.

We all need to be realistic and entrepreneurial in light of the present circumstances.  If you have a trustworthy tenant, you might like him/her/it to remain being your tenant.  If, however, you would like to make a claim for unpaid rent, then we need to follow certain protocols in order to make a successful claim.

When you have agreed on the heads of terms, or have queries in clarifying the details, or you would now like to make a claim against your tenant, do let me know by dropping me a line to mayumi.hawkes@cognitivelaw.co.uk.

Mayumi Hawkes