DSC05587 1024x576 - Covid-19 Frequently Asked Questions - Commercial Property

Covid-19 Frequently Asked Questions – Commercial Property

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Can a Commercial Tenant choose to withhold rent if they are financially effected by COVID-19?

The majority of leases will contain wording which prevents a tenant from withholding the whole or any part of the rent.

However, the Government have announced that commercial tenants who cannot afford to pay rent because of the financial effects of COVID-19 will be protected from eviction. This protective measure is included in the emergency Coronavirus Bill currently going through Parliament, and sets out that no commercial tenant will be forced out of their premises if they miss a payment in the next 3 months.

The rent will still be due under the lease after the three month period has passed (providing the government do not introduce an extension to this protective period). Landlords and Tenants are therefore expected to come to mutual and fair agreements in terms of repayment.

If any Landlord or Tenant is unsure of their rights or obligations under their Lease in terms of recovering rent, our Commercial Property experts can assist in reviewing your lease and providing professional advice to put your mind at ease.

We are able to offer our advice and expertise by telephone and video appointments so please rest assured that we are here to help you during these difficult times.

 

I am taking Bridging Finance and my lender requires me to take Independent Legal Advice. How can I do this given the current restrictions?

During these uncertain times, many business owners may be concerned with how COVID-19 will affect their businesses financially. One funding option for companies that need funds quickly is bridging finance, a quick turnaround loan whereby a lender can provide funds swiftly and will usually place a charge on property owned by the company, and perhaps a charge over the assets of the company itself (known as a debenture).

A common requirement for bridging lenders is that any guarantor’s obtain independent advice from a solicitor not dealing with the loan in relation to the terms of the guarantee. This is to confirm that the guarantor has fully understood the terms of the guarantee, and are aware of their obligations under this.

A question our Commercial Property team has been faced with is, ‘how do I obtain independent advice from a solicitor when I can’t meet with them in person?’

One solution that has been discussed is for the advising solicitor to provide the advice via a video conference call, and then produce an advice certificate to confirm that appropriate advice had been given and that the solicitor was confident that the guarantor has understood this advice.

If you are currently taking bridging finance and your lender requires this, you should check with them if they are able to be flexible in terms of their usual requirements, in order to accommodate the current climate.

If you require independent advice on a document and are able to have this via video call, our team of Commercial Property lawyers are fully equipped to provide this. We have invested heavily in technology that allows us to work on a ‘business as usual’ basis and are able to provide advice quickly and efficiently at a time that suits you.

 

Can I still sell and buy commercial premises at this time?

Yes, Poole Alcock LLP is open for business and is able to take instructions from you in the usual way.  We can open a file, obtain title documents and draft a sale contract for you.

In terms of purchasing properties, Poole Alcock LLP are carrying out transactions as normal via remote working. We are able to carry out title investigations and raise enquiries in the usual way and negotiate the transaction documents with other parties.

We can do all the necessary preparations to ensure that your sale is ready to proceed quickly as soon as both parties are in position to complete.

 

I am due to complete on my transaction next week – can you still complete with the other solicitors?

Yes, we are able to complete transactions in the normal way. Our Accounts Team is available and there is no impact on the movement of monies between solicitors, clients and banks.

We have arrangements in place that allow us to continue accepting post as well as sending documents out that would be needed for registration purposes.

 

I’m looking to take a new lease of premises – can you review the draft lease for me?

Yes, now is a good time to have the legal work carried out and finalized so that when the government restrictions are removed, you are ready to proceed without delay and can carry on your business as normal.

 

My lease is contracted out of the Landlord and Tenant Act and I need to get a Statutory Declaration sworn by an independent solicitor, can you assist?

With the current need for social distancing and restrictions put into force by the Government, firms have closed their doors to clients and the public in line with this guidance. It may therefore be difficult to have a Statutory Declaration sworn in the presence of an independent solicitor. Poole Alcock is still fully operational and working remotely and can assist you by negotiating a Simple Declaration as an alternative solution which does not need to be sworn in the presence of an independent solicitor.

 

I am in the middle of a development and it seems that Covid-19 will affect both the timing and cost of my project, can you help?

Projects could be affected in a number of ways, supply chains disrupted and lack of a work force due to self-isolation and quarantine. Contractors may struggle to complete on time and within budget. Your contractor may have signed a JCT, NEC, FIDC form of contract or your contract may not be on any one of these formal basis. Can the contractor say that the work as being delayed by a “Relevant Event” under the JCT form of contract because of force majeure or the exercise of a statutory power by the UK Government.? Has there been a Compensation Event under a NEC contract? Could the contract be terminated for frustration? Have you already agreed to sell or lease the development when completed and how will you obligations in that sale or agreement for lease be affected by the construction contract arrangements?

We can help by checking your construction contracts and third party agreements. We can check your insurance policies. We can advise how early liaison and co-operation may help in an industry otherwise known for its contentious approach

 

If you have any further questions arising from these points or for any other queries relating to commercial property, call us now or contact us using our online form and we will help you through this difficult time.

Make An Enquiry

Please submit your information and a member of the Poole Alcock team will respond to you as soon as possible. If you have a quick question, please feel free to call 0800 389 7093

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