Covid-19 – what options do you have?
Many businesses are facing challenges and uncertainty created by the rapid spread of Covid-19. With government advice to restrict all but non-essential travel and encouraging working from home as much as possible, nearly all business premises are now empty of staff. Not only does this mean many commercial premises are in effect redundant, for most businesses it limits their ability to trade. Inevitably this puts business and jobs at risk.
The Coronavirus Bill which received Royal Assent on 25th March is now an Act of Parliament and details the measures that will be implemented to stem the spread of Covid-19, but also the measures to help support individuals and businesses through this period of uncertainty. One such measure provides extra protection for businesses with a ban on eviction for commercial tenants who miss rent payments in the next 3 months.
Elsewhere, the Chancellor, Rishi Sunak has already announced plans to provide support to businesses to include business rates holidays (for retail, hospitality and leisure businesses), grant funding, loan schemes and new lending facilities. Daniel Watney have produced a series of papers on this subject which is available here./p>
While we await these further detail on other measures that will be provided to businesses, we have provided some considerations on how you might mitigate risks and costs during this uncertain period.
Rent Holidays / Payment Plans
Whilst the Cornavirus Act provides occupiers protection if they miss rental payments in the next 3 months, his rent will need to be settled at a later date. If your businesses has been adversely affected, your landlord may consider some kind of concession. Indeed, some institutional landlords have already announced rent relief/rent free periods. For example:
Whilst not every landlord will be prepared to offer such concessions, opening a dialogue with your landlord as soon as possible is advisable.
Most leases included provisions for Landlords to insure against numerous risks. If the definition of Insured Risks is wide enough to cover the pandemic, as an occupier you may be entitled to a rent suspension. When entering negotiations with your landlord, it is advisable to have a complete picture on the insurance provisions.
In addition, you may have business interruption insurance which covers events such as pandemic. As such, it may be possible to make a claim.
If you were/are contemplating an office move, the drastic measures put in place and uncertainty faced by all businesses will undoubtedly have caused a rethink on strategy.
You may be concerned that with a looming lease expiries or break dates you have no choice by to commit to a lease and paying rent without the ability to commence a fit out or take occupation.