The UK government has issued a code of practice for commercial property relationships during the Coronavirus pandemic. It is intended to reinforce and promote good practice amongst landlord and tenant relationships as they deal with income shocks caused by Covid-19.
The code is based on four principles:
- Transparency and collaboration
- A unified approach
- Government support
- Acting reasonably and responsibly.
Although the code highlights the hospitality, retail and leisure sectors, it applies to all commercial leases held by businesses that have been seriously negatively impacted by Covid-19. The code is voluntary. It does not change the relationship between landlord and tenant, which is defined by law. The code has the support of The British Chambers of Commerce, the British Property Federation, RICS and a wide range of industry bodies.
The code encourages clarity from tenants as to why they are seeking concessions from their landlords and transparency through providing appropriate and relevant financial information about their business. Landlords should provide concessions where they reasonably can. Landlords seeking to refuse concessions should be clear with their tenants about why they are doing so.
For further information contact Sean McGinness, E: [email protected], partner and head of Saffery’ Real Estate Practice Group.
