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Your commercial lease and Covid 19

Your commercial lease and Covid 19
Zoe McCaig Jul 20,2022

Due to the current pandemic, many tenants with commercial leases are facing difficulties. In times of financial hardship it is fairly common for landlords and tenants to disagree over their rights and responsibilities, so it is important that both parties understand their lease, especially with regard to break clauses and forfeiture rights.


The Coronavirus Act, passed in March, set out some measures to ease the financial pressure on commercial tenants. One of the measures which will be in place until 31 December 2020 states that landlords cannot exercise forfeiture of a lease just because a tenant has not paid rent. However tenants should behave reasonably, and any non-payment or reduced rent should be negotiated and agreed with the landlord first, and recorded properly in writing so that future disputes do not arise.


As a tenant if you are unable to negotiate a reduced rent or a rent-free period and are unable to continue with your lease, then there may be some additional options available to you, depending on the terms of your lease. Exercising a break clause - if your lease has one - would be the easiest option, allowing you to terminate the lease on the given break date. However if this date is far in the future you may wish to try to negotiate an early exit with the landlord instead. If neither of these options are possible you may be able to assign your lease to a third party, but again this will depend on the assignment clause in your lease and any restrictions the landlord may have put in place.


This article highlights some of the key points. If you are looking for assistance in negotiating or exiting your lease, please get in touch with our team and we can explore the options which are available to you. Please contact the team at TP Legal on 01483 751878 if you would like specific legal advice in the light of the new regulations, and we will be happy to help.