What Landlords and Tenants should do
There has been some misleading reporting around the measures that the Government have introduced relating to commercial rents.
Contrary to popular belief, there is no automatic moratorium on rents. Instead, what the Government has done is to announce a temporary freeze on a Landlord’s ability to forfeit a lease for non-payment of rent. The two things are entirely different and rents do still fall due, despite a Tenant’s potential inability to pay.
If a tenant is more concerned about cashflow, it may be that the ability to pay rent on a monthly basis is a valuable concession and tenants should not hesitate to make this request to their Landlords. A tenant who sees their income fall dramatically may consider requesting a rent holiday from their Landlord. We would always recommend that these matters are discussed and negotiated with a Landlord rather than being presented as a fait accompli.
A landlord should be prepared to listen to their tenants and be sensitive to any requests for a short term concession. Ultimately, the ability to forfeit for non-payment of rent will return but the rental market (particularly we think for offices) will alter as a result of current world events and Landlords who forfeit too quickly may be left with a longer term void in their income.