In this guest blog kindly provided by Chartered Surveyor and Commercial Lettings consultant Dominic Heath, we look ways for Business Tenants to reduce their overheads during the Coronavirus crisis.
If a business is concerned about their ability to pay rent, due to the emergency then they should communicate with the landlord as quickly as possible. Preferably this should be done directly, if not then via the landlords agents.
The business owner should be mindful that in the current climate landlords will most likely not wish to lose tenants and end existing tenancies. An untenanted empty property costs the landlord – they have to pay insurance costs, pay for repairs and maintenance, security costs, utility costs and normally pay Business Rates (after 3 months). So landlords are better off having their premises occupied, even if they get no rent.
At this time landlords know they are extremely unlikely to be able to find new tenants for their property and time soon. So, if due to the emergency, a tenant cannot pay rent, landlords are most likely to agree to a rent holiday. This will allow the tenant to stay in occupation with premises costs massively reduced. The tenant will still have to pay for insurance, utilities, security, repairs and maintenance.
The most important thing is for tenants to contact their landlords as quickly as possible and maintain a dialog. This will give both landlords and tenants the best chance of getting through the crisis.
The Government have with immediate effect cancelled the payment of all Business Rates for at least 12 months for all retail, leisure and hospitality businesses. So business premises occupiers in these sectors that normally pay Business Rates will have an immediate saving.
Premises occupiers benefiting from Small Business Rates Relief will be eligible for a grant of £10,000. We believe that business owners should wait for their Local Authority to contact them about getting the grant.
In addition small business property occupiers in the retail, leisure and hospitality can receive a grant of up to £25,000. The increased amount is available to occupiers of premises with rateable value of more than £15,000 and less than £51,000.
Acknowledgements: Thank you to Dominic Heath for this advice.