The ongoing pandemic crisis is having far-reaching consequences across the commercial property sector. Landlords and tenants are seeking to address a fair balance of risk between themselves, not only to facilitate ongoing business and trade, but also to balance the books. It is hard to imagine a situation where a landlord would be expected to step in following a government mandated closure or a tenant would be obliged to continue to pay full rent when they are unable to occupy and trade from their premises.
So, what is the solution? How is the risk allocated between landlord and tenant? In an effort to share the financial loss, some parties are introducing rent concession provisions into new leases or by way of a side letter. This paper considers different options currently being negotiated and agreed in the market.
Source: cms.law
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