Commercial Rent and Coronavirus
Are we still able to enforce against non-payment of due quarterly rent?
Yes, the ability to instruct Debt Squared under CRAR presently remains available.
Can I instruct Debt Squared to effect Forfeiture of Lease?
No, the government has ordered a moratorium on commercial landlord sanctions for at least three months, meaning tenants who miss rent payments because of coronavirus can keep their leases.
CRAR: The most current and important consideration
A number of our clients have asked the question: “Are we still able to enforce against non-payment of due quarterly rent?”
The answer to this is yes you are.
Notwithstanding the above, in this challenging environment you may wish to take a view on how strongly you apply enforcement, and take account of any particular negative cashflow impacts that your tenants may be suffering.
The option of obtaining a CRAR Enforcement Notices still remains open to you, and ensures that you maintain a level of control over the bad debt situation. Whether you choose immediate enforcement or you wish to provide tenants with a period of more relaxed grace whilst combatting any negative impacts from the spread of COVID-19 and the government restrictions, once you have the Enforcement Notice in place you have a 12 month period from date of issue in which you can apply the Warrant of Control to secure payment. This effectively puts you in control and able to take whatever approach you feel is most appropriate with your tenants and hence best protecting landlord interests.
Though quite clearly many companies are going to face significant financial difficulties in the short term, not all will suffer to the degree that their ability to pay rent is impacted. Obviously, in order to ensure that you are able to take the right commercial decisions through this period whilst maintaining a high level of understanding and empathy, you need to be able to distinguish between those tenants who are suffering badly and those who are managing to trade at or near normal levels. The Debt Squared FREE Business Credit Risk Rating Report enables you to get an up to date picture of the financial status of your clients, and better inform your decision-making processes through this critical period.
Debt Squared Group are here to help
By now we are all aware that we are in unprecedented territory and being challenged to ensure we display the best traits of humanity whilst fulfilling our ongoing commercial responsibilities.
Our experienced and professional team of advisors are on hand to help you make the right decisions and apply the most appropriate actions to each given situation of coronavirus in the UK.
- Call for FREE advice on 0800 002 9049