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COVID-19 – potential property litigation issues

The outbreak of COVID-19 (coronavirus) is clearly having an impact in almost all aspects of day-to-day life throughout the world. The rights and obligations of individuals and companies in relation to  property are not immune from potential impact.

Clearly, the type and extent of the impact faced by individuals and companies in relation to their property rights as a result of COVID-19 is highly fact specific, however, the types of disruption which could be faced as a result of the outbreak includes:

  • Impacts on contractual obligations

The great majority of property contracts were drafted before the outbreak of COVID-19. Parties to such contracts still have imposed upon them various contractual obligations.. Subject to agreement with the other side and the terms of the overall contract, such obligations will still need to be complied with irrespective the outbreak.

All individuals and companies should analyse all existing and future contractual obligations and assess how the current outbreak is likely to impact on their ability to fulfil these obligations. If it is clear that a contractual obligation is unlikely to be achieved, steps should be immediately taken to mitigate any potential adverse consequences..  

Likewise, if an obligation is not adhered to as contractually required, individuals and companies should seek advice in relation to potential remedies stemming from these breaches.

  • Service of Notices

It is currently unclear how (and if at all) the postal service in the UK will be affected by the outbreak. What is clear is that various property notices are likely to still need to be served throughout the duration of the outbreak. This is especially so if there is a specific deadline on service (e.g. break notices for leases or section 25/26 Landlord and Tenant Act 1954 notices).

Individuals and companies should assess in plenty of time whether they are required to serve any property based notices. If they are  unclear as to whether they are required to, advice should be sought at the earliest possibility. Whilst this is always the case, extra time for the service of notice should be factored in given the outbreak and potential disruption to the postal service etc.

  • Rents cession

During the period of HM Government advising social distancing, many tenants of commercial properties across the UK will be looking to their landlords for so-called ‘Rent Holidays’ (i.e. a period of time where the landlord will not demand rent or will accept a reduce rent etc).

Whether the tenant is allowed to seek a rent cession and/or whether a landlord is required to give one depends on the terms of the specific lease of the property in question.

If landlord/tenants are unclear as to their respective rights and obligations in relation to rent cession periods, advice should be sought immediately to avoid potential claims.

For further advice on any property litigation issues, either in relation to COVID-19 or generally, please contact Rob Nicholson, Katherine Breckin or Henry Roberts.

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