Disrupted: The traditional balance of power between a landlord and tenant

Historically, the landlord and tenant relationship dates back to the feudal system and possibly beyond, where land owners had the upper hand. It’s probably fair to say that the relationship resembled one of “a master/servant”. Over time, the property industry has seen the change in the balance of power in this relationship where case law and legislation has been introduced to create a fairer balance between the parties.

In the wake of the recent pandemic and the considerable challenges it has thrown at this historic relationship, are we about to witness a tip in the balance of power in favour of tenants? It certainly seems that way, with the introduction of the Coronavirus Act 2020 which implemented measures postponing a landlord’s ability to exercise its right of forfeiture in respect of non-payment of rent against business tenants for a certain period, which period may well be extended. These measures were to provide tenants with “breathing space”. However, with the incredible uncertainty of this pandemic, there are many landlords who feel they are caught between a “rock and a hard place” particularly when they have funding secured against their properties. Banks are under no obligations to show flexibility to commercial borrowers.

What is clear is that the impact of this pandemic will have long term effects in the property market fundamentally changing the relationship between landlords and tenants. Now more than ever, landlord and tenants are going to have to be proactive and adopt a collaborative approach, to reach sensible and realistic solutions to help both parties weather the economic storm this pandemic has forced upon their relationship. The Government is currently considering introducing a code of practice to encourage all parties to work together to protect viable business and ensure a swift recovery. The objective of this code is to bring a fairer balance between the parties so that no one party shoulders the full burden of this economic strain. Are we heading to a mid-position on the balance of power between landlords and tenants when looking at the scales of justice

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