This voluntary code of practice is one of the measures announced by the Government over the last few months to address the impact of COVID-19 on commercial property.
The code looks to set out key principles and best practice for landlords and tenants in discussing payment arrangements in relation to existing leases, including rent, service charge and insurance payments. It includes suggested issues for landlords to take into account when considering the requests of tenants to renegotiate rents, as well as possible options for new arrangements that could be agreed by landlords and tenants.
While the code is expected to be needed by some sectors more than others (notably hospitality, retail and leisure) it is not sector-specific. It applies to all commercial leases held by businesses which have been seriously negatively impacted by the COVID-19 crisis.
Being voluntary, it remains to be seen what impact the code will have on negotiations between landlords and tenants, particularly as we enter the June quarter.
Government has published a code of practice to help commercial landlords and tenants map out plans for economic recovery during the coronavirus pandemic. Developed in close collaboration between government and leaders from the sector, the code is designed to provide clarity for businesses when discussing rental payments and to encourage best practice so that every part of the chain is supported. The code is voluntary in nature and is relevant for all commercial leases held by businesses in any sector which have been impacted by the coronavirus pandemic. It encourages tenants to continue to pay their rent in full if they are in a position to do so and advises that others should pay what they can, whilst acknowledging that landlords should provide support to businesses if they too are able to do so.
https://www.gov.uk/government/publications/code-of-practice-for-the-commercial-property-sector
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