11/5/21 – Growing interest in possible Court cases for landlords vs tenants

In a little over a fortnight, Courts in England will start to hear cases from landlords who will be permitted to take action against tenants for non-payment of rent since the COVID pandemic began. This will be the first time in over 14 months that landlords have been able to take action and interest is growing to see how this will develop.

There is estimated to be over £9 billion in unpaid rent in the retail sector alone and until now, where tenants have not been paying rent, landlords have been restrained and not able to take action. In some instances, landlords and tenants have come to a mutual agreement either writing off a portion of the debt or negotiating to pay it back over a certain period, often with a new longer lease.

For some landlords, however, they have been unable to do this and no rent has been paid. It is clear that in these instances, where the amounts can be considerable, claiming all the debt back in one lump sum will bankrupt businesses and with the sheer number of cases waiting to be heard, this has the potential to flood the property market with available buildings.

There is pressure for the Courts to treat the ‘Covid’ debt element differently and ask landlords and tenants to effectively suggest an alternative repayment plan. This has merit in reducing the amount of stock that comes onto the market in one go and will benefit landlords as it will help to maintain rents and prices.

There has to be sympathy though for some landlords where tenants have continued to trade, taken government money, furloughed staff, not paid business rates and similarly, rent. Most landlords have mortgages to pay and they have had to do so with no income and no way to claim their property back.

As the date for the opening of the Courts nears, we are seeing more landlords and tenants speaking to us about the future. We encourage all parties to seek advice as soon as possible as we can often mediate a solution where possible and/or prepare to place a property onto the market where a solution cannot unfortunately be found.

For some landlords we can help speed up the process to obtain vital rental income whilst for tenants, we may be able to find properties that they can relocate to.

Contact Matthew Bowen, Director in Aitchison Raffety’s Commercial Agency team, to discuss options for your premises on 01727 843 232 or matthew.bowen@argroup.co.uk.