Any member struggling to pay their rent amid the coronavirus crisis must speak to their landlord without delay.
That’s the message from Commercial Plus managing director Barry Frost who urges cash strapped retailers to act by contacting their landlord to agree a mutually beneficial payment plan that benefits both parties through to April next year.
Mr Frost’s advice follows government legislation in March (with variations in Scotland) that prevents commercial landlords from taking any action to evict any tenant who has fallen into arrears.
This legislation has been extended twice and as things stand now, it will expire on December 31st.
In April, payments for business rates will resume, along with repayments associated with Covid related borrowing.
Mr Frost told TheFedOnline: “It is, therefore, very important that if you are struggling to pay your rent, you contact your landlord without delay, to try an arrange a mutually beneficial payment plan that helps both parties in trying to make it through to at least April 2020.”
In June, the government introduced a Code of Practice for commercial property relationships during the Covid-19 pandemic (https://www.gov.uk/government/publications/code-of-practice-for-the-commercial-property-sector/code-of-practice-for-commercial-property-relationships-during-the-covid-19-pandemic ). This is designed to guide both landlords and tenants as to how they should proceed in such negotiations, but Mr Frost advised that this is very much voluntary and this needs to be born in mind before approaching a landlord.
“Within a commercial lease, anything is possible when the landlord and tenant agree, and this is very much a time when both parties need to work together. These exceptional times will require foresight and patience from landlords and if the government does not extend the expiry date of the legislation beyond the end of the year, there is likely to be a long queue at bailiffs’ doors.
“Sending a bailiff or commencing legal proceedings to forfeit a lease or collect a debt should be considered only as a last resort, as this action is most likely to result a closure of the business. This might seem the best course of action for a landlord in a buoyant commercial property market where re-letting might be straightforward, but given where we are now, a property that stands empty for months or even years is the more likely outcome.”
He concluded: “Common sense from all parties is by far and away the best advice to the wider commercial property industry. Any negotiations with landlords need to be handled sensitively. It’s critical that the right approach is taken. I’m happy to speak to your landlords on your behalf or simply offer advice as how to approach the issue in the right way.”
With more than 30 years of experience in finance and commercial property, Commercial Plus has provided invaluable assistance to thousands of NFRN members. It can also assist with applications for Covid-19 related funds. Call Barry today on 01244 659101.