Distressed landlords and tenants were watching yesterday’s Government announcement with much anticipation, for details of any assistance that may be provided in relation to commercial rents.
They key points outlined were:
- Consistent with the previous announcement about the economy being put into “hibernation” there is now a moratorium on evictions for the next 6 months for both commercial and residential premises;
- All affected parties, meaning landlords, tenants and their banks are encouraged in the strongest possible terms to engage in meaningful negotiations with a view to the tenant’s business being in a position to re-open once the COVID-19 threat has passed; and
- There are further announcements to be made in the future regarding assistance for stricken landlords and tenants in terms of their rent, however the Government has threatened that no such assistance will be provided to those who do not comply with the government’s request to work co-operatively with their tenants to ensure the survival of the tenant’s business through the current crisis.
That being the case, all parties would be well advised to have open lines of communication and work together in a reasonable and sensible manner to assist the tenant’s business to remain open.
What that looks like in any given situation is likely to vary greatly depending on the extent to which the tenant’s business has been affected and the amount of leeway that will be given by the landlord’s mortgagee.
To best manage the situation, it may be necessary for those discussions to be ongoing and for the respective positions to be reviewed until the tenant’s business is on the road to recovery, as further announcements are made by the Government in this space.
Please contact a member of our Commercial + Property Team if you require advice regarding rental arrangements or if you need us to facilitate these discussions.
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