Coronavirus Act 2020: Rent Arrangements in Northern Ireland

Published 22 April 2020

For Northern Ireland business tenants paying rent quarterly, we are staggering closer to the first Northern Ireland quarter day (1st May) since lockdown began. In anticipation of rent falling due, we have been advising both landlords and tenants on available options and trying to balance competing interests.

There has been considerable publicity about rights of forfeiture being suspended for non-payment of rent, however the current arrangements under s.83 of the Coronavirus Act 2020 does not prevent landlords from serving a statutory demand or commencing winding up proceedings. Often this is influenced by a landlord’s banking position so that those with debt are more inflexible than those who don’t.

From a landlords perspective, most of the usual remedies are therefore available for non-payment of rent:

Suing for the debt

Serving a statutory demand before issuing insolvency proceedings;

Drawing upon funds held in a rent deposit

From the tenant’s perspective the following should be considered:

Whether there is any government assistance available for the tenant to cover rent

Whether the tenant’s business interruption insurance will pay out to cover rental payments.

If neither of these apply, it may not be in the landlord’s best interest to pursue a tenant at this time.

If a landlord is satisfied that there is a genuine risk to an otherwise good business that can be avoided by a rent concession, the options available are:

1) Permitting rent to be paid monthly

2) Agreeing to defer rent

3) A rent concession where some rent is written off

Each of these needs to be documented by way of a Side Letter or a variation to the existing lease.

Rental concessions are not too costly or time consuming to record. If you have agreed one, or would like advice on the best way of recording this, then please get in touch with a member of our commercial property team.

This article is for general guidance only and should not be regarded as a substitute for professional legal advice.

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