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:

  • Tenants discuss rent concessions with their landlord sooner rather than later;
  • Both landlords and tenants act within the Government guidance of working collaboratively during this national emergency;
  • Any concessions granted by landlords are recorded and where possible advice is sought, and any agreements are documented in a side letter; and
  • The terms of any agreements ensure they are simple, concise and deal with not only the now but the future.

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.

If you would like further advice on rent concessions Myerson are here to help. You can contact us on 0161-941-4000 or via email.