Covid 19: Update for Landlords and Tenants

Covid 19: Update for Landlords and Tenants

Both landlords and tenants will be (and or have been already) the subject of real problems as a result of the Covid 19 pandemic. As the press and indeed the Government are already reporting rent may not be paid; premises will closed; and landlords will struggle in turn.

The Coronavirus Bill

The Coronavirus Bill has just come into force and late in the day sections were introduced dealing with business tenancies. Its provisions will last until 30 June with an option for extension if needed:

In summary the key provisions which concerns commercial leases are

  1. No ground for forfeiture – no business (in England, Wales or Northern Ireland) will be subject to re-entry/forfeiture if they miss a rent payment in the next three months.
  2. No ground for possession – for tenants with security of tenure under the Landlord and Tenant Act 1954, no landlord will be able to rely on any non-payment of rent during this period to establish a ground for possession at the end of the term.
  3. Rent payments – Under the Bill, “rent” includes “any sum a tenant is liable to pay under a relevant business tenancy”.

In the Government’s own words, this package supports the many conversations taking place between landlords and tenants, with the aim of establishing voluntary rental concession arrangements

Please note that “rent” includes service charge, interest and insurance premiums (i.e. it goes further than our side letters do). This of course doesn’t impact on debt recovery, just forfeiture.

To assist landlords (and tenants) rent concession letters should be carefully drafted (please contact Palmers at” for advice and assistance on this subject. At this moment in time rent concessions are falling into two categories

  1. A monthly payment concession – where the landlord agrees to receive rent on a monthly basis, rather than a quarterly one, to ease cash flow for a period of time.
  2. A deferred payment concession – where the landlord agrees to defer collection of the whole or part of the (March and maybe June) quarter’s rent until a later date.

Of course, neither of these concession letters amounts to a variation of the lease itself – both landlord and tenant should be aware that they are merely waiving the exercise of the landlord’s rights for a specified period. If landlord and tenant are thinking of something that speaks to rent reduction or other amendments, you might illl need a Deed of Variation to make it effective and binding.

Importantly, also, consider the impact of either of any such arrangements on the landlord’s (and tenants) banking facilities. It is possible that waiving rights or negotiating concessions is prohibited by its loan agreements, or that lender consent is required and for a tenant non payment of rent could also trigger a default with the bank.

Investment Landlords and the residential sector

Information from the Coronavirus Bill is still being digested but

  1. The Bill suspends new evictions from social or private rented accommodation while this national emergency is taking place.
  2. No new possession proceedings through applications to the court to start during the crisis.
  3. Landlords will also be protected as 3 month mortgage payment holiday is extended to Buy to Let mortgages.

Government assistance

The government have announced a raft of measures aimed to support businesses through the severe economic turbulence caused by the coronavirus crisis. This support includes:

  1. 12-month business rates holiday for all retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible. There is no action required to be taken. It should apply automatically to the next council tax bill in April 2020.
  2. Additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
  3. The Retail and Hospitality Grant Scheme will provide businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property with a rateable value between £15,000 and £51,000.
  4. Business interruption loans for SMEs. The Government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
  5. All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.


We want to protect you and our staff from the spread of coronavirus.

We would kindly request, where possible, that you contact us by telephone or email in preference to attending personally at our offices.

If you are feeling unwell or have been in contact with anyone who is unwell, please do not visit our offices.

Where possible, please send correspondence and documentation to us electronically so that we are able to progress matters remotely if necessary. Thank you for your co-operation.