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Should a landlord agree to a voluntary arrangement?

20-08-2020


The current social and economic landscape provides major challenges for both landlords and tenants alike. Where voluntary arrangements are agreed by landlords and tenants these should be recorded formally by way of a deed of variation or side letter which has been properly executed by the parties. Legal advice should be sought by both parties.

However, landlords should be mindful that enforcing strict compliance with lease terms may result in tenant insolvency leaving the premises empty at a time when it is likely to be difficult to find a replacement tenant. It may therefore be in a landlord’s interest to agree to a voluntary arrangement to help a tenant in financial distress. Landlords should approach negotiations with tenants constructively to ensure the medium and long term sustainability of both businesses.

Our commercial property team have published further information for tenants and landlords. Read here their guidance on how tenants can reduce their financial liabilities and how landlords should respond to a tenant claiming financial distress.


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