Lawyer on landlords turning screws on retailers such as Boots
In light of recent news that commercial property landlords are starting to turn the screws on retailers such as Boots and Matalan, Linden Talbot, Associate – Commercial Litigation at law firm Trethowans, comments: * “The nature of the circumstances leading up to the Coronavirus Act being given Royal Assent were such that a “one size fits all” approach had to be implemented. In hindsight it may have been better to consider the economic standing of a tenant to determine whether or not the protection applies.*
“Inevitably, this approach lends itself to criticism when tenant companies, who are sometimes owned by incredibly wealthy individuals or parent organisations, take advantage of the scheme in the same way as a small business owner does. Contrast Burger King’s, Primark’s and JD Sports’ position, which in the case of Burger King is to push for a nine month rent deferment and which many would consider to be an abuse of the current protection with, with that of Dunelm which launched talks with its landlords. * “Landlords are caught in the middle: do they ride it out hoping that their tenant will recover financially (after all, the obligation to pay rent has only be deferred, not written off) or do they take alternative action to forfeiture (which for the present time is prohibited), for example issuing a winding up petition. The risk with the second option is that the landlord ends up in an even worse position, potentially with a vacant unit and a fraction of their debt paid.* * “The overriding intention of the legislation was to support tenants through this difficult time, but many will have sympathy for landlords to tenant companies that continue to trade and/or have alternative means of funding their obligations but are seemingly taking advantage of the current law to the landlord’s detriment.”*
“The emphasis continues to be work together and only resort to enforcement if all else fails.“
This was posted in Bdaily's Members' News section by Trethowans .
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