Reduction in rents could help to revive Britain's cities, says lawyer
Analysts have warned that Britain could face a tsunami of legal cases as landlords seek to recover rents owed from the pandemic.
However, one legal firm believes landlords are under significant pressure to negotiate with tenants as a first step.
The coronavirus pandemic has led to several Company Voluntary Agreements - or CVAs - across the retail, leisure and hospitality sectors.
Yorkshire firm Schofield Sweeney argues that recent legal rulings involving tenants who seek to avoid debts through CVAs are largely upheld by courts.
Commenting on the issue, Richard Jobes, partner at Schofield Sweeney, said: “Recent rulings on CVAs will only deepen tensions between tenants and landlords, as both sides seek to find a solution to the debts that have amassed through the pandemic.
"Landlords are not without options, but this is largely limited to threatening debt claims in the courts. We are having to use such threats to negotiate the best possible deals with tenants. Both sides usually want to find a way forward that helps the tenant continue to trade, and the landlord recoups some of the debt.”
Mr Jobes said that everyone is eagerly awaiting the Government’s proposals for dealing with the "wall of arrears".
He predicts we might see certain debts to be ring-fenced and a dispute-resolution mechanism put in place to impose a payment schedule. It is in neither parties’ interest to lose a trading relationship that was once profitable, he added.
Mr Jobes added: “Landlords continue to face uncertainty over how the issue of rent arrears will play out over the coming months. However, there can be little doubt that our high streets will be transformed over the next year or so, but I hope that any reduction in rents will lead to a greater vibrancy in our towns and cities.