You are contacting
Michael Grace
Partner - Head of Real Estate
Commercial real estate & Real estate disputes
On 19 June 2020 the government published the Code of Practice for Commercial Property Relationships. It’s purpose is to provide guidance for landlords and tenants to encourage a swift economic recovery.
Collyer Bristow’s Head of Real estate, Michael Grace, provides comment.
The Government has published a new code of practice that is intended to provide guidance for landlords and tenants to encourage a swift economic recovery.
The Code of Practice for Commercial Property Relationships During the Covid-19 Pandemic will be welcomed by landlords and tenants but is not without its problems.
The key elements of the Code are:-
The Code is designed to encourage landlords and tenants to work collaboratively together and with complete openness and visibility, meaning, amongst other things, the sharing of financial information. Yet, that information is likely be confidential and commercially sensitive. Landlords and tenants may naturally be reluctant to share this information, and maybe rightly so.
It is also important to remember that the Code does not change the legal position that tenants are liable for the covenants and payment obligations under a lease unless renegotiated by both parties. The Code does sit alongside other measures, such as the moratorium on forfeiture of commercial leases, however the Code and those measures do not follow the same timelines, meaning at some point the Code and those measures no longer align.
The Code has no teeth or means to sanction those that choose not to adopt it, meaning whilst tenants will welcome its introductionlandlords may simply pay it lip service.
Many landlords feel that they have had enough pain and that this Code offers no balance or real help for them, notwithstanding the measures of Covid-19 related support Government has made available.
23 June 2020
You are contacting
Partner - Head of Real Estate