Susanne Hinde of Hewitsons writes:
Whilst we are in unprecedented times during the COVID-19 lockdown, the legal obligations in many documents remain unchanged. There have been many articles about whether tenants can walk away from their leases, and generally speaking the answer is that they cannot. Whilst a moratorium on forfeiture continues to be in place until 30 June 2020 (which may be extended), this does not affect the underlying obligations to pay all sums due under the lease and to comply with the obligations in the lease. This applies particularly in relation to the giving of notices.
There are times in a landlord and tenant relationship where the parties need to communicate on practical matters, and in such cases, e-mail has its place. There are benefits in terms of its immediacy and audit trail, however more often than not e-mail will not suffice for any communication under a lease where a formal notice should be served. Despite the encouragement of the government for landlords and tenants to co-operate, no party should be lulled into a false sense of security that legal obligations have been relaxed other than where stated under the Coronavirus Act 2020.
To the untrained eye, it may seem over the top to get the pen and paper out and to spend time and money posting a letter with a wet ink signature when an e-mail to the right person would do, but beware, notice provisions are there to be complied with, in full, unless you want to risk the notice being deemed to be invalid. Unless the break is a rolling break (characterised by the wording “on or after [date]” or similar wording), missing a break date can mean that a tenant is tied into the lease and all the lease obligations until the next break opportunity (if any) or until the end of the lease.
There may be various provisions which require a formal notice to be sent – if you look through a lease you may see various provisions requiring consent or approval to be obtained or for notice to be served. In the current market tenants may be particularly interested in an exit strategy. This may mean an assignment, underletting or the exercise of a break. The lease will usually set out in some detail what form that consent, approval or notice should take and how it should be communicated. The service of statutory notices such as notices under the Landlord and Tenant Act 1954 is not governed by the lease itself but by legislation, so careful consideration should be given the service of any notice in connection with a lease.
If considering exercising a break clause, the advice first and foremost is to take legal advice in good time to make sure you get the service of the notice right. A solicitor will be able to review and interpret the provisions of the lease and any appropriate applicable legislation to establish:
- The form of the notice including whether any specific date should be mentioned in it
- Whether it needs to be signed and by whom
- How it should be sent
- Whether or not it should be sent by several different methods and to several addressees
- Whether a receipt will be obtained as part of the service or whether the service is ‘deemed’ once sent, this is particularly relevant where a recipient’s office is closed
- Any additional steps that may need to be considered if a notice “is deemed served unless the contrary is shown”
- The timing of the notice
It is worth noting that notices should be sent with sufficient time for posting as these services are taking longer than normal. Account should also be taken of the fact that many offices are currently unattended, and even if employees are present in offices, many will not open for callers as they are limiting contact.
The flipside to this is that all parties should make sure that post is collected and reviewed frequently and scanned where it can be so that it can be distributed to the right person. If necessary, get post re-directed, and consider whether post is being effectively reviewed if it is being sent to a centralised registered office. A change to the registered office in the short term may be useful.
If you wish to discuss any of the contents of this article with a member of the Hewitsons Real Estate or Real Estate Litigation Team please contact Susanne Hinde on 01223 532728 or click here to e-mail Susanne.