Does Force Majeure apply to the leasing of commercial property?
Some commercial tenants have queried whether the current situation is a force majeure which may allow it to terminate the lease. Clauses which allow a party to terminate a lease for a force majeure event or, to put it another way, an “act of God”, are however extremely rare in modern commercial leases. Even if there is such a provision in your lease, it would need to be drafted to apply to an outbreak of disease.
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Although these measures fall short of the level of assurance given to employees both in terms of eligibility for an immediacy of access to payments, they are a vast improvement on the support for self-employed workers that has been put in place until now. Current support includes:
- Access to business interruption loans
- Self-assessment tax payments that were due in July 2020 have been deferred until January 2021
- VAT is deferred until the next quarter
- The introduction of Time to Pay arrangements under which deferrals for HMRC payments can be agreed
- The minimum income floor for universal credit has been suspended which will allow self-employed workers to access the equivalent of Statutory Sick Pay (SSP)
- Universal credit and tax credit payments to increase by £1000 per year
Crucially the phrase “force majeure” has no specific meaning in English law. As a result, there is scope for complex legal argument, including as to whether the effects of the coronavirus outbreak can amount to force majeure in the first place. If the coronavirus crisis deepens, force majeure provisions could become relevant in the following ways:
- suppliers to your business might seek to invoke force majeure
- you may need to invoke force majeure under your own contracts
Each of these will need careful analysis of the relevant contract against the applicable factual background. Unfortunately, the position is unlikely to be clear cut.
As discussed above, Covid-19 will inevitably deplete the workforce of housing providers in the foreseeable future. It would be prudent to consider making short-term policy changes to deal with this situation and manage the expectations of tenants going forward. A key policy change to consider is the extension of the standard lead-time for completing all non-urgent repairs and inform tenants of this change.
Such a change will also reduce pressure on landlords and front-facing staff.
As above, employers must protect the interests of their staff, particularly regarding health and safety. Extra care should be exercised when assessing the level of emergency of a repair on a case by case basis. All efforts should be made to reduce the number of attendances at properties by repair staff, whilst keeping all tenants safe.
As ever, communication is key – the pandemic cannot be used as a blanket excuse for abstaining from all duties and obligations. Housing providers must take a pragmatic approach in safeguarding customers whilst considering the interests of is workers. Maintaining lines of communication with all parties remains paramount.
- On admission to hospital, all adults should be assessed for frailty, irrespective of their age and Covid-19 status. Regard should be had to any comorbidities and underlying health conditions.
- If a patient is identified as potentially having Covid-19, the UK Government guidance on infection prevention and control measures should be followed.
- If Covid-19 is then diagnosed in someone who is not isolated from admission or presentation, the UK Government guidance on actions required when a case was not diagnosed on admission should be followed.
Yes, they can continue to undertake duties or activities for representative purposes. This includes individual or collective representation of their colleagues. They must not carry out any actual work or generate revenue for their employer or a linked or associated organisation.