As a pioneering tenant rep it’s in my DNA to push landlords. I’ve spent more than 40 years aggressively negotiating lease breaks, fighting rental penalties, securing service charge caps and extracting capital contributions from often reluctant or unwilling building owners.
But if coronavirus has taught me anything during this (hopefully) once in a lifetime crisis is that if your business needs help, now’s the time to reach out and ask for it.
The UK government has established a Lease Forfeiture Moratorium which prohibits a landlord from forfeiting a business tenancy or instituting legal proceedings for non-payment of rent between 25 March 2020 and 30 June 2020. The new legislation also provides for the Government to extend this initial period if it considers it’s appropriate.
Admittedly many tenants are guilty of blatant opportunism by demanding reductions, rental holidays or simply withholding payments which in some cases is frankly embarrassing – while for others it’s a battle for survival.
With certain exceptions, I’ve found landlord’s responses to cases of genuine hardship frustratingly inconsistent.
On the one hand my own landlord (a respected law firm) to their credit immediately offered their valued tenants an initial 80% reduction in their fees from 23 March until 30 April 2020 – albeit without prejudice to their rights under contract – with an assurance to review matters on a month-to-month basis.
Conversely, another landlord has requested the ‘full belt and braces’, ie. audited accounts for my client, their US parent and management accounts for each entity before they will even consider any request for a rental deferment.
I get it that landlords need to balance its desire to support their tenants through this unprecedented time with its obligations to other stakeholders but for heaven’s sake my client hasn’t be able to access their building since 16 March !
Monthly payments may alleviate a short term cash-flow challenge but landlords have Loss of Rent Insurance and if they haven’t I’ve got an incredible team of brokers at Square Mile Insurance Services in Aldgate who I’d be delighted to recommend.
I’m not advocating deferring 100% of my client’s contributions across the board since I believe it is crucial to maintain service charge payments allowing building facilities to continue to function smoothly and without interruption for when we’re feeling comfortable to get back on the tube and train or queue for a sandwich or a pint.
I’ll be happy to discuss your options by carefully reviewing your lease, its obligations and the impact that the COVID19 pandemic may be having on your business.
While you’ll be using this surreal time to recalibrate your principle business objectives I’d also urge you to pick up the phone and check-in to see how your clients, contacts and friends are coping too. Share your thoughts, experiences and suggestions and see what you can do to help.
Showing empathy is not a weakness.
All being well, we’ll all come out the other side with an increased level of compassion, community and respect for one and other … so long as we don’t run out of loo roll !
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