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Commercial Rent Arrears During The Covid-19 Lockdown5th May 2020

by Neil Andrews on 5th May 2020

Contact Neil Andrews

Under the Coronavirus Act, landlords are not allowed to forfeit leases for non-payment of rent until June 30 2020. 

And if – as a landlord – you thought you could simply go down the insolvency route instead by issuing a winding up order, think again.

The government has temporarily banned landlords from using statutory demands and winding up petitions against tenants who cannot pay rent due to coronavirus – again until June 30 2020.

But that does not detract from the fact that rents are still due. Tenants and guarantors remain liable to pay rent. Tenants who can pay rent should do so. Directors should think about whether they have given personal guarantees. 

Tenants who genuinely cannot pay rent should inform their landlords as soon as possible. Open and honest communication will improve the chances of the situation being salvageable.

Landlords may consider drawing down from rent deposits and/or entering into payment arrangements. 

There is nothing stopping landlords issuing County Court money claims against tenants. These claims may include interest and costs. But they will take longer to conclude because the courts are in lockdown and will face a backlog when they reopen.

Deferring The Rent

Another option is a rent deferral. Our commercial property solicitors have been helping landlords to help their valued tenants by writing letters to this effect. The same applies to tenants who wish to request a rent deferral from their landlord. 

Many tenants are worried about their lease obligations. Some are seeking a quick way out or a rent suspension.

Landlords question whether they still have to provide services if the tenants are not paying rent. Or whether they have to agree to a concession on rent. Or if they have to provide deep cleaning in communal areas. Find the answers to all these questions here.

Find Out More About Your Rights

Get expert legal advice on commercial property disputes. For more information, contact Managing Partner Neil Andrews (Head of the Commercial Department) or Partner Kerry Houston-Kypta (Head of Commercial Property).

This document is not intended to constitute and should not be used as a substitute for legal advice on any specific matter. No liability for the accuracy of the content of this document, or the consequences of relying on it, is assumed by the author. If you seek further information, please contact Managing Partner Neil Andrews at Coles Miller Solicitors LLP.