Non payment of commercial rent due to Covid19

[Fugawi]

Got a commercial tenant renting offices and warehouse from us. Been a tenant for about 5 years. Pretty big company operating nationally. 1st of April when quarterly rent was due they wrote to us saying due to Covid and reduced cashflow they would be unable to pay the rent. They would write to us again at the end of June to update us on the situation. By the end of June they will owe another quarters rent.

We've sent statements of their arrears to them just as a gentle reminder.

Just wondering what our legal rights are here to recover the money? We've let things lie for the time being but feel 3 months before they even update us is a bit unreasonable.

[DSLiverpool]

Could you offer to accept the last quarter over the remaining year ? A little give and take might save a lot of hassle.

[Gooose]

I thought being commercial you can tell them to either pay or you will change the locks and sell all there stuff?

[Stay in Bed Instead]

There is currently a prohibition on landlords forfeiting the Lease through non payment of rent. This lasts until the end of June 2020 I think. Some tenants are clearly just taking advantage of this.

As far as I am aware you can still apply for a CCJ or a winding up order if a Ltd is the tenant.

[Fugawi]

Correct, a bit off googling has taken me to this
https://www.gov.uk/government/news/new-measures-to...

Seems like not much can be done until 30th June, however, by the they will owe 91 days rent so the temporary rules put in place won't apply unless the gov extend the current legilsation?

[jonah35]

You could kick them out

But then you’d have an empty office and warehouse that you’ll be paying rates on

Personally I’d look to reduce their rent and do what you can to keep them

[DKL]

I wish I could get any flexibility out of our LL. I've been in contact from day one to try and thrash out some sort of reduciton for these two periods as we are running on about 10% revenue. Their response? A winding up order and a debt collection agency in the first 10 days post end of March.
Once the last set of rules came in stopping WUO for 3 months they eventually offered an extra 9 months to pay what I still owed (not all of the rent, I have paid some). June's bill I think is still expected in full and on time.
Their response is no flexibility as that costs us our margin.. you'd think they don't actually want any tenants after all this.
I'll keep plugging away.

[Stay in Bed Instead]

I wasn't aware that winding up orders had been prohibited. Have you got a link please?

[Stay in Bed Instead]

Found it.

https://www.gov.uk/government/news/new-measures-to...

[ninja-lewis]

Fugawi said:

We've let things lie for the time being but feel 3 months before they even update us is a bit unreasonable.

Are they actively trading at the moment? 3 months for an update could just be due to the relevant staff being furloughed.

[loafer123]

First step is to ask for detailed financial information in the form of Management Accounts to justify their position.

If they have demonstrable issues, you can choose to move them to monthly rents or to defer rents to later in their lease.

[Fugawi]

ninja-lewis said:

Are they actively trading at the moment? 3 months for an update could just be due to the relevant staff being furloughed.

I think as a company they are on a wider basis, although there has been virtually no activity at our premises that I've seen.