Unfortunately, with the implications of COVID-19 generating financial difficulty and uncertainty across the country, many landlords will increasingly encounter tenants who are struggling to find sufficient funds to meet their rental payments.
Landlords may offer a reduced rate of rent or some other alternative rent benefit to a perspective or current tenant. This is known as a rent concession.
It is important that any rent concessions are accurately documented to ensure that it shows a deferment rather than a waiver or variation of the lease and to ensure that any guarantor is not released from their liability to the landlord.
A rent concession can be documented by a side letter. The letter deals with (in simple terms), the who, what, when, where and how the rent concession is to come into force. The very nature of the side letter enables a landlord to enact various other approaches to obtain the rent for example, accepting delayed rent payments, offering rent free periods, varying payment dates.
Equally, landlords too are facing the harsh reality of the COVID-19 spread. Traditionally, landlords who need to protect their investments are not compelled to agree variations to rental payments.
However, with the emergency Coronavirus Bill 2020 we recommend that:
There is no doubt that countless tenants will encounter difficulties meeting rental payments. A “strained” relationship between the landlord and tenant resulting from the outbreak raises a whole magnitude of possible further issues.