In brief

The economy has been dramatically affected by COVID-19 and it is likely we will continue to suffer from the financial effects for months to come.

I have had numerous calls from tenants asking what will happen to their lease. What can a tenant do if they are shut down or sales are reduced?

What you need to know

Most leases will not allow a lease to be terminated, or the rent to be reduced because of COVID -19.

What should tenants do?

Speak to your landlord now.

Very few tenants (and certainly not retail tenants) will enter into a lease now. So landlords are unlikely to terminate leases due to non-payment of rent. Of course, it may give some landlords an excuse to end leases where vacant possession is required, such as for a redevelopment.

So it is unlikely that leases will give any comfort to tenants. It is really up to the landlord and tenant to talk now!


We act for numerous tenants and will be entering discussions with various landlords.

What are we seeking?

  1. Percentage rent only payable.
  2. Tenant will continue to make payments for electricity, phone etc.
  3. Outgoings are discussed on a case by case basis.
  4. Term of lease extended while shutdown continues, or reduced sales/business.

The above needs to be documented in a variation of the lease.

The alternative for landlords is an empty premise and we know of tenants who plan on walking out and vacating premises.


How can we help?

If tenants in shopping centres or with the same landlord can come together and share any legal costs, this will reduce costs for all. We can assist with negotiations with landlords,

For landlords, we will need to discuss the various alternatives

Please contact us urgently so we can assist.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.