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Coronavirus and Commercial Leases: 10 Questions Answered 1. Can a tenant terminate a lease ? Tenants are not entitled to terminate their lease because they either choose to close their business or can no longer afford to pay the rent, un - less they are entitled to exercise a break clause under the terms of their lease. Commercial leases do not usually contain a force majeure clause that may (depending on its wording) allow a contracting party to termi - nate a contract in certain unforeseen circumstances, such as natural dis - asters, etc. One exception to the right to termi - nate would be if a tenant goes into liquidation, in which case the liq - uidator could terminate the lease by following a procedure called dis - claimer. This only applies on a liqui - dation, not administration or any other form of insolvency. 2. Can a tenant withdraw from an exchanged agreement for lease (AFL) ? This will depend on the various clauses and wording in the AFL that govern termination and rescission. Not all AFLs have a force majeure clause, but most recent legal com - mentaries do not think that most standard force majeure clauses would apply to the Coronavirus outbreak… 3. Can a tenant withhold rent or pay a reduced amount ? A tenant is not entitled to withhold rent or pay a reduced amount due to a reduction in footfall and res - ulting cash-flow problems, whether or not a tenant chooses to cease trading either temporarily or permanently… 4. Does a tenant have to con - tinue paying business rates and could a landlord become responsible ? 5. Would a tenant be insured ? 6. Who is responsible to man - age the virus within let premises ? 7. Must tenants comply with their keep-open covenant ? 8. What are a landlord’s obligations ? 9. Can any additional costs be recovered under the service charge ? 10. Are there any other poten - tial risks to a landlord ?

Reasons to Sublet your space If you are renting office space you may find that you are now review - ing your space requirements. This may lead to identifying surplus space that may no longer serve your business but is causing a drain on your financial resources. You might even consider subletting the entire space if you are chan - ging the location and logistics of your business to suit new staff arrangements.   One option is to sublet these spaces, cut back on wastage and save money by recovering some of the costs for that space. Check your Lease Before considering whether you should look to sublet your space you need to check whether you are permitted to sublet under the terms of your lease. Do not go through all the trouble of finding a subtenant before checking your contractual obligations. Some leases prohibit subletting; others may allow for partial sublet - ting but with specific conditions such as on a floor by floor basis or some other configuration. There might be restrictions as to whom you can sublet to or there might be insufficient time left on your lease to generate interest in the market. For larger demises, the number of sublets might be restricted. If you find that you are restricted by your lease but need to find a solution you might consider talking to your Landlord to see if he is will - ing to relax the restriction/s and permit a subletting. Forward thinking Landlord’s in this business climate are probably more inclined to help their tenant’s find a solution, so you might still find options available to you… There are further legal considera - tions for occupiers under lease ar - rangements. These include: Tenant applications for Landlord’s consent to alterations … Dilapidations protocols and tenant obligations to repair and reinstate premises at the end of a lease term …