Increasingly clients are seeking advice where they receive letters advising that a tenant company has gone into administration or is about to do so. Advising that the company is unable to pay rent, with their often being arrears. The on-going (at the date hereof 9 April 2021) commercial property moratorium further complicates matters.
The pandemic has wrought havoc across the High Street with extended periods of enforced closure or potentially reduced footfall for essential businesses allowed to remain open. It is becoming common for businesses to look to administration.
We are seeing more situations where administrators seek to assign leases to a Newco but on terms less favourable to landlords than their legal rights. It is likely to be the case that landlords can require all arrears to be paid and seek comfort about the covenant strength of the Newco (perhaps with larger rent deposits or personal guarantees).
What we commonly see however are letters from administrators written in vague terms presenting a limited number of options, often unattractive to a landlord, with the suggestion that those are the only options. They might not be, and it would be sensible to seek legal advice to inform your thinking in addition to any commercial realities that the administrators set out.
AK Law is a firm of property law professionals which deals with all aspects of property law; our team is able to assist on all transactional and contentious property matters. The firm typically acts for property asset management companies and HNW investors. We can be contacted on 020 8280 0810 or firstname.lastname@example.org to discuss your property law needs.