Warning to commercial property tenants as rent claims rise

22nd October 2020, 4:37 pm

Specialist lawyers are warning commercial property tenants to beware as rent arrears claims are rising in the county courts.

Although protections have been afforded to tenants throughout the Covid-19 crisis – and some of these protections have been extended until the end of December 2020 – landlords are still being hit hard and so are finding ways to secure arrears.

Graham McIntyre, a partner and property litigation specialist at national law firm Clarke Willmott LLP, said: “Early indications are that commercial rent collection for the September quarter was up slightly up on the June quarter’s collection figures demonstrating a positive improvement on the lockdown property landscape.

“Having said this, there are some cases where tenants have simply refused to engage with their landlords, some not having paid a penny of rent since the December 2019 quarter day. In those cases, landlords are losing patience and we are seeing an uptick in rent arrears claims in the county courts.

“Such claims are not restricted by the Coronavirus Act 2020 and the various Statutory Instruments that have restricted other enforcement options.

“Of course, court proceedings can prove to be costly with the issue fee for claims over £200,000 being £10,000, which will usually be added to the debt.”

The British Property Federation estimates total rent unpaid for UK commercial property between late March and the end of December will be around £4.5 billion.

Protections currently afforded to tenants include for forfeiture, CRAR (bailiff distress for rent arrears) and some insolvency options.

Graham continued: “Generally our experience has been that landlord and tenants have reached accommodations through sensible dialogue over the last six months and this would be the best approach going forward.

“This is one situation where silence will definitely not prove to be golden for tenants and some adherence to the Government’s Code of Practice would be sensible.”

Graham McIntyre is a partner in the First Tier property litigation team at Clarke Willmott. He specialises in property portfolio management and property disputes.

Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.

The Code of Practice mentioned by Graham can be found here – https://www.gov.uk/government/publications/code-of-practice-for-the-commercial-property-sector.

More information about Clarke Willmott can be found at www.clarkewillmott.com

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