The current Covid-19 pandemic has had an unprecedented impact on all our lives and has already presented numerous challenges to businesses, big and small, and continues to do so on an almost daily basis.
From a real estate point of view, there are a number of immediate and important implications as well as other policy and planning decisions to be made notwithstanding the shifting sands of a still evolving situation.
Here are a few updates and practical tips from a commercial property perspective:-
Execution of documents – immediate attention should be given to how documents are to be executed in the current lockdown with usual signatories dispersed, authority processes disrupted and limited resources to copy and circulate documents. Most larger organisations will, of course, have business continuity plans which provide alternative processes and we recommend that those are instigated as soon as possible, particularly if completions are due. If need be, we can assist with the implementation of the necessary measures or provide advice to those who may not already have a default procedure in place.
Land Registry – the Registry is continuing to operate and process applications but its officers are doing so remotely and so inevitably there will be delays in addition to the Registry’s existing backlog. We are pressing the Registry to issue guidance relaxing some of its usual requirements (in relation to such matters as execution of deeds and provision of certified copy documents) in the hope that it will be flexible so that completions can occur and registration applications are not rejected for want of compliance with formalities which it is difficult, or impossible, to satisfy in the current circumstances;
Landlord and tenant – there are a plethora of considerations for landlords and tenants alike: payment of rents and service charges; compliance with lease terms when premises are unoccupied or used in a different manner (e.g. a restaurant being used as a take-away); landlord’s duties (especially in the case of multi-let premises) and access to premises to mention but a few. The Coronavirus Act 2020, which became law on 25 March, has already suspended a landlord’s ability to take forfeiture action for business tenancies in England and Wales, so no business tenant can be forced from their premises if they miss a rent payment (which includes all sums due under a lease) in the period to 30 June 2020. Many landlords and tenants are already actively engaging with each other to reach agreement in relation to rent payments and other matters and we can provide advice both as to the terms of particular leases and to facilitate negotiations as well as assisting with preparation of any documentation required to clearly and properly record any arrangement reached.
Contracts – in the light of the changed landscape at the moment, review of existing contracts, especially those relating to transactions due to complete in the next few months, is advisable in order to re-assess those and identify any potential hurdles to facilitate contingency planning (in terms of performance of obligations, compliance with procedural requirements and completion logistics) and/or further discussion with any counter-party. The sooner a review and reassessment takes place, the better in order to allow as much time as possible for due consideration to be given to all relevant factors and any consequential negotiations to take place. Undoubtedly careful thought will already be being given to contracts currently in the course of negotiation and we can offer both general (e.g. in relation to the inclusion of Covid-19 provisions) and transaction specific advice.
These comments are not intended to be a complete summary of the challenges and, in such unusual and fluid and novel circumstances, there will inevitably be other factors and scenarios to consider. Please get in touch with your usual contact in the Real Estate team if you would like to discuss how we can help or require more specific advice.