25 June, 2020
Landlords are increasingly feeling the pinch at the moment when it comes to property.
Due to the current pandemic tenants are seeking deferments in rent or are simply opting not to pay at all. Whilst many are in the position where they genuinely cannot pay the rent some are simply using the opportunity to have a rent-free period knowing that landlords' options are limited.
The current moratorium on forfeiture on commercial leases was due to end on 30 June, however, this has now been extended until 30 September leaving landlords not being able to evict tenants whose many businesses are now opening, but not receiving rent for another few months. Tenants are also aware that even if landlords could evict who would fill the premises?
Whilst the proposed property code of conduct encourages landlords be sympathetic and to enter into negotiations what are their options when the negotiations leads to a flat refusal of payment.
Whilst insolvency options are not available currently Landlords do have the ability to issue through the courts for rent arrears as a claim. Thereafter, should they wish they can enforce the judgment using bailiffs.
The threat of proceedings or simply the sending of draft proceedings to tenants may prompt them to pay or at least make an offer in respect of rent arrears and payments going forward.
Furthermore, whilst legal costs are ordinarily unrecoverable for those actions under £10,000 many leases have clauses to allow the recoverability of costs meaning landlords won't be out of pocket.
If you're a landlord and wish to discuss how best to proceed with regard to current rent arrears then please contact us.
For more information contact Rebecca Cowdy in our Dispute Resolution department via email or phone on 0333 207 4468. Alternatively send any question through to Forbes Solicitors via our online Contact Form.