The past few weeks have caused unprecedented issues for everyone. Health and wellbeing must be top of everyone’s agenda. Stresses arise from myriad directions. Batcheller Monkhouse’s management teams has been dealing with numerous enquiries from residential tenants anxious about their ability to pay their rents and commercial occupiers fearing that business income will dry up. At the same time farmers and rural businesses, reliant on diversified income from holiday lets, venue hire and other enterprises, are seeing this essential source of revenue evaporate. The knock-on effects of this crisis are staggering, and it seems everyone and everything is inter-linked.
It is likely that we will be dealing with Covid-19 and the after effects for months to come. The fundamental question therefore is how we can all get through this and be back up and running as soon as possible?
Now is the time for a unified strategy to help all recover as quickly as possible. Our view is that it is incumbent on both sides of the landlord/tenant equation to work together to find a workable solution. Only then will the wider economy recover.
Key questions need to be asked.
What financial assistance is already available?
There is a huge amount of help out there in various forms. This includes:
- Furloughing arrangements for employees
- Self-employment income support
- Rates relief for some sectors including hospitality, leisure, retail and others
- Business Support Grant – offering up to £25,000 cash for certain sectors
- Income Tax and VAT deferments
- Mortgage holidays
- Business Interruption Loan Scheme
- Commercial Banks offering repayment holidays and restructuring
We would strongly recommend that both landlord and tenant explore these avenues before agreeing to any measures.
What steps might be taken?
While there are numerous financial measures designed to support the economy and protect individuals from economic crisis, clearly there will be instances where measures need to be taken. Such measures might include:
- Rent deferments – partial or whole
- Rent holidays
- Rent reductions
- Change in payment dates – quarterly changed to monthly.
Such measures can only be agreed by mutual consent. Open dialogue is the key to success. No tenant should expect their landlord to willingly agree to a deal to reduce income unless they are confident that all other support measures have not been properly investigated. At the same time, however, no landlord will want to see a tenant get into financial difficulties, difficulties that may make their recovery only more arduous. A careful balance needs to be struck.
Once all the facts are known we would recommend that a flexible agreement is reached under which any financial measures are subject to review, perhaps on a month by month basis. We have developed such agreements that are already working well.
Working together the rural economy can weather this storm. Please contact your local Batcheller Monkhouse office for advice and help, whether you are a landlord or a tenant.