I lease commercial premises. Can my landlord forfeit my lease?
As part of the Coronavirus Bill there is some good news for tenants in so far as it included the following:
- All commercial tenants in England, Wales and Northern Ireland missing rent payments are to benefit from a government ban on forfeiture of their lease.
- Landlords then will be prevented from terminating leases and “evicting” commercial tenants.
- The above provisions rules will apply not only to principal rent, but to “any sum a tenant is required to pay”, leaving the burden of supplying services and insuring the premises on landlords. The bill will last until 30 June 2020, with an option for the government to extend this deadline.
Whist this is helpful to any Tenant planning not to pay rent or other payments due under their lease insofar as they will not suffer forfeiture and be evicted, it should be noted that the contractual obligation to continue paying rent and all other costs due under the lease remains and Landlords will still be able to take action to recover any payments due under the lease that are in arrears.
Related FAQs
It is envisaged that employees of organisations falling into the first two categories set out above and won’t be eligible for the job retention scheme in relation to the majority of their employees. It is envisaged that NHS Trusts for example are going to require their staff to be working at full capacity where possible. However, the guidance doesn’t definitely exclude public sector organisations from furloughing employees and notably the government expects such organisations to use public money to continue to pay staff and not furlough them, rather than say requires. In reality, it is difficult to see how such an organisation will be able to rely on the scheme, but the guidance doesn’t completely rule it out.
The obvious option to reduce the cost of your workforce is redundancy. However, that also reduces the number of employees and therefore your capacity.
All employers have a duty to prevent illegal working, and carrying out proper Right to Work checks are a fundamental part of this. In light of Covid-19, the Home Office has brought in some temporary measures for employers to use to carry out the requisite Right to Work checks. Failure to follow these could lead to enforcement action and penalties.
There have always been ways for public bodies to assist without being required to notify these for approval. These continue to be available during the financial crisis, and are likely to be increasingly useful for measures which need to be introduced quickly. The measures include:
Those where it is possible to conclude that there is no effect on trade between Member States – for example, measures which are likely to have only a limited local effect. The European Commission has concluded, for example, that measures to assist locally-focused cultural activity can be assumed to have no effect on inter-State trade.
Those where it is possible to conclude that the State is acting in a way consistent with a commercial operator (the so-called Market Economy Operator Principle) – particular care will need to be taken in the context of current economic conditions to ensure that it can reasonably be asserted that a commercial operator would act in the same way as the public body.
Measures under the General Block Exemption Regulation – this legislation allows various types of aid, or aid schemes, to be employed.
Examples include aid for SMEs, aid for research and development, aid for local infrastructure and aid to ports and airports.
De Minimis Measures – Member States are permitted to grant small amounts of aid to undertakings over three fiscal years (the current year and the previous two years). This allows undertakings to receive up to €200,000 (or €500,000 where they are providing public services).
On 13 March 2020 the Secretary of State for Housing, Communities and Local Government issued a Written Statement in respect of delivery restrictions.
In this respect, many supermarkets, food retailers and distribution centres in England operate under planning restrictions (conditions and/or obligations) which limit the time and number of deliveries from lorries and other delivery vehicles which can take place particularly at night primarily to protect the residential amenity of nearby residential property.
Key points in the Statement include;
- Given the exceptional challenges facing the UK from the coronavirus, it is vital that deliveries of food, sanitary and other essential products over the coming weeks can be made as quickly and safely as possible, minimising disruption to the supply chains. The likely pressures on driver capacity mean additional flexibility is needed so that retailers can accept deliveries throughout the day and night where necessary.
- That planning enforcement is discretionary and that local planning authorities should act proportionately in responding to suspected breaches of planning control.
- That local planning authorities should not seek to undertake planning enforcement action which would result in unnecessarily restricting deliveries of food and other essential deliveries during this period having regard to their legal obligations.
The Statement acknowledges that the increased frequency of deliveries particularly at night could have a temporary impact on residents. It therefore concludes that the Government will review the need for the flexibility outlined in the Statement after the pressure from the coronavirus has reduced and that it is the intention to withdraw it once the immediate urgency has subsided.
A link to the Written Statement is below.