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  • Dino Montepara

TO PAY OR NOT TO PAY - IS THAT THE QUESTION


Many commercial leases have a clause which deals with an emergency situation preventing a tenant from fully conducting their business because they cannot have access to the premises. Our current situation under the Covid-19 lockdown may trigger this clause.

If this clause is triggered then a fair proportion of the rent and outgoings cease to be payable for the period that the tenant is unable to access the premises.

However, what is considered to be a ‘fair proportion’ can look very different depending on whether you are in the landlord’s shoes or the tenant’s shoes. Does it mean that no rent is payable because you cannot run your business at all? Or are you still able to run close to capacity from home because that is how you have structured your business; in which case there might be no rent reduction? And what happens after we move to Alert Level 3 or 2 and we can start operating our businesses but in a more restricted way than usual which allows some income to come in, but not all? These are very complex issues and may very well keep landlords and tenants fighting with each other for months or years to come. The reality is, we do not know what business is going to look like in the near future; what impact is this going to have on our livelihoods. And this is whether you are in the shoes of the landlord or the tenant. If you are a landlord, do you know whether you will be able to find another tenant to occupy your premises when the lockdown ends? If you are a tenant, are you certain that you would be able to find other suitable premises to run your business from when things steer back towards normality? Who knows? These are unprecedented times that we are living in and we need to hold onto this African proverb: “If you want to go fast, go alone. If you want to go far, go together.” So instead of looking at your issues in isolation (whether a landlord or a tenant), rather work together as landlord and tenant to find a way forward that will help foster the relationship far into the future. We are here to help if you need any advice on your rights as a landlord or tenant; or if you would like someone to be with you in working things through with your landlord or tenant. Let’s step into each other’s shoes and go far together.

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