While many commercial landlords are already reaching voluntary arrangements with tenants, there will be some businesses worried about security of tenure during this difficult period and this change will provide much-needed certainty.
However, it is important to note that this is not a rental holiday and landlords are still owed rent. If this is not paid once the legislation has lapsed, they will be able to claim for forfeiture.
We are however concerned that this measure helps occupiers without giving much help to landlords and landlords themselves will need further intervention from government if they are to help as many businesses as possible over the coming weeks. A number of landlords are contacting their bank for capital payment holidays and the waiving of interest due to a lack of rental income and also encouraging their tenants to seek access to relevant government loans.
The key for our property investment clients, particularly with retail tenants or with student accommodation assets, is to seek relief from the bank in managing their cash flows whilst following our earlier advice in delaying relevant VAT and PAYE payments and accessing where possible the relevant government loans.
For more information, contact Stacy Eden or your usual Crowe contact.
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