Lincoln-based chartered surveyor Banks Long & Co have been supporting landlords and tenants challenged by the Coronavirus “lockdown” and the firm promised there will be no let-up in its efforts in the uncertain weeks ahead.
Since 23 March, the firm’s management team has been working tirelessly to ensure that the concerns of both parties are acknowledged, solutions sought and that the challenges presented by the lockdown have been dealt with head-on, proactively and positively.
Associate Director Sarah Pettefar said: “The biggest concern for both sides has been, and remains, the payment of rent. The Government’s assistance in the form of business interruption loans, business rates grants, the furlough scheme and business rates holiday – as well as the provision for the self-employed and the payment of VAT – has been welcomed by occupiers.
“However, it has been apparent that although the assistance offered provides breathing space, it does not replace a business’ ability to earn revenue through sales and it is far from a long-term solution.
“In working closely with landlords and tenants to find solutions for the payment of rent and other monies, we have found that, although there is no single solution to suit all, there is a pervading spirit of negotiation – with both parties willing and prepared to discuss solutions which take into account the difficulties each is facing.”
Sarah said terms have been agreed based on the deferment of rent payments, rent reductions, adjusted payment terms and the re-gearing of leases. Matters that need considering when agreeing revised payment terms:
Section 82 of the Coronavirus Act 2020 provides protection from forfeiture in relation to the non-payment of rent for the period ending 30 June, 2020. However, this does not mean the tenant has an automatic right to avoid paying rent for this period. Terms agreed are down to the negotiation of the parties – however, there is no fixed format for this.
Any terms agreed should be formally-documented and should consider matters such as the payment of other monies – such as the service charge – and provide for whether interest will accrue on the outstanding balance. In addition, any concession should be made personal to the tenant, be non- transferable and for a fixed period. This can be done via a side letter or similar “document.”
If the property is subject to a mortgage, it is likely that the terms and conditions will require the bank’s consent, prior to any concession being entered into which affects income. This means the lender should be notified, prior to formal agreement being reached.
“The lockdown period has not only affected rent payments, it has also changed how businesses occupy premises. Many companies have switched to home-working, leaving buildings empty or with just a skeleton staff,” said Sarah.
“As Managing Agent, Banks Long & Co has been reviewing service charge budgets and contracts and identify if savings can be made or service levels reduced. We have put in place measures to deal with compliance issues – such as fire risk management and legionella monitoring.
“We have contractors on stand-by, ready to carry out deep cleans, in the event of a rare case of Covid-9 in a property, and have been working closely with our approved contractors to deal with reactive repair works – ensuring these can be completed inline with social distancing restrictions.”
Property Management department staff have worked with building insurance providers to ensure insurers’ requirements are met, should a property be temporarily unoccupied.
“We are proud to have taken a proactive approach – irrespective of whether an issue is financial or practical – although it is clear our work in relation to Covid-19 is far from over.” added Sarah.