One of the most common questions I am asked at the moment is whether businesses still need to pay their commercial rent during the Covid-19 pandemic.

In short, the answer is yes you do – even if your business is currently closed.

The only exception may be if there is a ‘force majeure’ clause within the lease – which means either party can terminate a lease when an “extraordinary” event occurs; however these are rarely found in a standard commercial lease.

Most leases state that rent must be paid without deduction, so unless the lease contains a clause which enables rent not to be paid, the tenant will be bound and expected to pay rent.

Another option to look for is whether your lease contains an upcoming break clause, which would enable the tenant to terminate the lease early and walk away from its obligations.

Alternatively, a tenant could exercise their ability to assign or underlet the property, if the lease allows this, which most leases do. This is when you effectively sell the lease on to a third party.

However, both of these options may have conditions on them which require rent to be paid up to date before they can be exercised.

If a tenant is struggling to meet their rental payment obligations, then I would always advise them to speak to their landlord in the first instance because an agreement may be able to be reached amicably.

The Government is offering guidance in the form of a paper called The Code of Practice For Commercial Property Landlord and Tenants to refer to during the pandemic.

The paper looks at ways to resolve commercial property issues during the pandemic, and while it is not mandatory or legally enforceable, it is designed to help both landlords and tenants during this difficult time.

Please give me a call on 01691 652241 or email charlotte.nutting@lblaw.co.uk