Commercial Lease rent relief – post 29 September 2020
If you have entered into rent relief under a commercial lease, in the absence of further agreement, this arrangement expired on 29 September 2020. New rent relief regulations (COVID-19 Omnibus (Emergency measures)(Commercial Leases and licences) Miscellaneous Amendments Regulations 2020 ) (New Regulations) are now in place and subject to meeting the new criteria, have extended the period of rent relief to 31 December 2020.
It is important to note that any previously agreed rent relief does not automatically extend to 31 December 2020 and the eligibility criteria has also changed.
The New Regulations state that any applications for rent relief only apply to the period between the new request for rent relief and 31 December 2020. Therefore, if you are a tenant and need rent relief until 31 December 2020, you need to get your request in as soon as possible.
The New Regulations have also changed the information that must be provided to a landlord. An application for rent relief under the New Regulations must contain additional information to that previously provided under the old regime. Any reduction in turnover must now relate to the premises not the whole of business which was the test for rent relief under the old regime. Rent relief under the New Regulations must be by way of at least 50% rent waiver and 50% rent deferral. Any deferred rent must be repaid by the tenant over the greater of 2 years or the balance of the remaining term. Whilst a landlord and tenant can agree to extend the earlier rent relief arrangement, please note that a landlord is not obliged to extend the earlier arrangement and may commence any new rent relief from the date that the request for rent relief (and all supporting information) is received by the landlord.
If you are a tenant wanting to obtain rent relief or a landlord receiving applications for rent relief and would like further advice in relation to navigating the New Regulations, your rights and obligations, please contact Ross Millen, Keith Hanslow or Sally Lloyd.