Options for Landlords
Where to start? Landlords and tenants are finding themselves in the unique but now widespread situation of premises being prevented from opening and doing business. Meanwhile, the rent still accrues under the lease. Unsurprisingly, landlords are exploring ways of negotiating this ‘new normal’ (now an all-too familiar turn of phrase). Without obligation, there are options available to a landlord wishing to assist a tenant in these challenging times.
Landlords could agree to a tenant paying rent monthly rather than quarterly, or negotiate a reduced rent, to assist the tenant’s cashflow.
Tenants could be offered rent holidays, sadly not involving a sun lounger and a cold beer, but definitely more practical right now – a break from paying the rent while business premises are closed. This is a case of putting off the inevitable, as the rent will still accrue under the lease during lockdown, but it at least means one less pressure on the immediate finances of the tenant and may assist in maintaining the tenant’s solvency. Of course, this option in turn may be challenging for a landlord’s cashflow, particularly where there are mortgage repayments to be met.
Where cashflow isn’t critical, a generous landlord may offer a rent waiver to tenants (i.e. the rent holiday, without the need to pay the money back). Commendable, but tricky for landlords where property letting is their business. Challenging times.
It goes without saying that legal advice should be sought prior to making any changes to the terms of a lease. Changes should be properly documented in order to avoid any issues once the parties seek to revert back to the usual lease terms.
Land Registry Changes to Signing Rules
More positively, the Land Registry has taken the welcome step of allowing a temporary relaxation to the rules around signing documents. Those who are familiar with the Land Registry will know how it is usually a stickler for the rules, so any relaxation is welcome news for property transactions.
Essentially, whilst ‘wet’ signatures will still be required on documents in the usual way (including by witnesses, who cannot witness by video call but must actually be physically present with the signatory), the relaxation allows a scanned version of those wet signatures to be utilised for a completion by solicitors.
This sidesteps issues that traditional methods of signing have for those who are self-isolating (no need to visit the solicitor’s office or leave your house to post the original document). With many lawyers currently working from home, this also means fewer practical constraints to the completion itself (avoiding the need for lawyers to hot-foot it to the office to collect an original document as it arrives in the post). The relaxation of the signing rules is being billed as ‘temporary’, so something to make use of while it lasts. Part of the new normal (much like everything else).