Although special legislation was brought in at the end of March to protect tenants, commercial landlords are still, or will soon be chasing their rents withheld due to the current lockdown situation. They have their own debts, or financial commitments to manage, just like their tenants.
All this comes after figures at Easter revealed that just 4,200 companies have been able to get the Government’s emergency coronavirus bailout loans – out of 300,000 applicants. The worrying figures emerged despite the scheme already being overhauled once, earlier this month when businesses complained they had problems accessing the cash. Even former Governor of the Bank of England, Lord Mervyn King, commented that “Something has gone wrong. The economy will only recover if we can keep businesses running and able to pick up the reins when this crisis is over.”
Section 82 of the Coronavirus Act 2020, introduced on 25 March, intended to help protect commercial tenants by banning the forfeiture of commercial leases until 30 June – or longer if the Government deems necessary – for non-payment of rent. However, it does not stop landlords from taking action such as rent arrears recovery, making a debt claim, issuing a statutory demand or starting winding-up proceedings.
Whether you are a tenant or landlord, the situation isn’t good on either side and when the UK (fully) comes out of lockdown and tries to get going again, the commercial landscape is inevitably going to look different with many businesses in debt and unable to survive. The high street is already witnessing a number of high profile retail outlets going into administration over the last few months, UKActiv, which represents many of the country’s gym chains, warned of possible closures and 100,000 redundancies as they struggle with their rents when they’ve had to freeze all membership subscriptions, calling on the Government to take further supportive action. The hospitality sector is another victim with many bars and restaurants having thrown in the towel already and closed down for good.
With all this uncertainty in the sector and property sales at a virtual standstill, abandoned, mothballed and vacant property everywhere will be a fact of life for months to come, if not longer. It is therefore critical that owners and tenants safeguard their buildings from the huge increase in vandalism, squatting and fly tipping that is the consequence of the above tale of business and property woe.
It’s not difficult to lockdown and mothball premises properly, whether for a few weeks or potentially longer if it’s been vacated, but it needs to be done efficiently and expert advice should be taken to ensure all aspects have been covered. There’s far more to it than clearing stock from the shelves, switching off the lights and locking the doors and windows! And do remember to check insurance policies to ensure you’re still covered for the duration. As well as the building itself, for all the out of town sites such as pubs, hotels and retail parks, care must be taken to ensure the car parks are secure as well, to deal with the enormous 300% upsurge in flytipping recently reported by councils across the country.
Simple measures like a chain of concrete blocks should keep out the worst offenders. Quick, cost-effective and easy to install and remove, blocks are the best way to avoid the nightmare of flytipping which can cost £’000s to clear legally and safely.
The consequences of this lockdown are far-reaching. To keep your property safe through and after if necessary, take professional advice and protect your assets so you are best placed to bounce back as soon as you can.