Hastily enacted regulations addressing a fast-unfolding pandemic have introduced a layer of complexity around leases between tenants and landlords.
Governments worldwide have implemented a range of emergency legal and fiscal policies to help cushion the economic damage caused by COVID-19 travel restrictions and stay-home measures.
Each jurisdiction has established its own rules, resulting in myriad policies around returning to work, rent relief and codes of conduct for payment forbearance, and for helping tenants or property owners get access to government grants and loans.
“Many of these relate in some way to either direct fiscal support or regulatory suspension of the standard legal requirements around the tenant-landlord relationship,” says Jeremy Kelly, a director in JLL Global Research.
In Singapore, for instance, the government has granted tax rebates and cash grants to landlords whose SME tenants have seen their gross income between April and June fall more than 35 percent.
In the UK, businesses in the retail, hospitality and leisure sectors are able to obtain a cash grant of up to £25,000 ($32,000) per property.
In Australia, landlords get a 25 per cent reduction in land tax liability for 2019-2020, provided this is passed on to tenants. A
cross the developed world, moratoriums on the forfeiture of commercial leases by landlords for non-payment of rent are also common.
Many of these measures are tenant-friendly. Given the current soft market conditions, tenants are arguably in a stronger negotiating position in many markets, says Kelly.
This has led to…
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