Landlords and tenants are concerned about the impact that the Coronavirus crisis is having, and will have, on the ongoing landlord and tenant relationship.

It is important to keep up to date with advice published by the government and regulatory agencies and the availability of any Government relief measures or assistance.

Tenants are already approaching landlords seeking some financial arrangement or compromise, whether that takes the form of a rent reduction, rent payment waiver or deferral and/or changing advance payment arrangements from quarterly to monthly. Some landlords might hold a rent deposit which the landlord might agree to utilise to assist the situation.

If the lease is a long term arrangement, prompt action and adjustment now might make the difference in allowing both landlord and tenant to protect the long term future of a lease arrangement which has up until now worked very satisfactorily for both, and potentially reduce the risk of business cessations and future void properties.

If a tenant is unable to occupy, due to Coronavirus circumstances, it is unlikely that the lease itself will contain any clear and obvious remedy, nevertheless questions and issues will be raised. Examples are:

  • Can the Lease be terminated due to the tenant being prevented from occupying the property?
  • Can the tenant lawfully withhold rent or claim suspension of rent?
  • What is the effect on rent review or turnover rent operation?
  • What are the implications for the property insurance?
  • What if the tenant is subject to a keep open/trading clause in the lease?
  • What are the possible legal consequences if the tenant is unable to pay rent?

The Scottish Government has partly addressed the last of these by emergency legislation – see our blog item Covid-19: Emergency Legislation Affecting Tenancies.

We can advise in detail on the above matters so please get in touch with your usual Turcan Connell contact if you require specific advice, whether on your own lease, other real estate matters or any wider business issues, or contact enquiries@turcanconnell.com. .