Rent recovery outlook for commercial and residential landlords

Rent recovery outlook for commercial and residential landlords

For two years, Landlords have been subject to restrictions in regard to chasing tenants for unpaid rent. Since the end of March 2022, restrictions have been lifted. So what steps can you, as a Landlord now take to recover rent due to you, or indeed, remove your problem tenants?

The majority of tenants are honest and pay their rent when it’s due. Some, when they get into financial problems, discuss the situation with their landlord in a reasonable manner. The Covid crisis brought landlord / tenant relationships where rent is concerned into sharp focus, and over the past two years Landlords have faced considerable restrictions on how they can pursue an errant tenant over rent or in evicting them.

Where private tenants are concerned, recent figures from the The English Housing Survey 2020-21 suggest that as many as 4% of private renters are behind in their payments. Worst still, debt collection agencies working to recover some of this debt on behalf of landlords report that even though many renters have the means to pay, some have chosen to use Covid as an excuse not to pay.

Choosing not to pay rent and forcing the landlord to take action is not new, but Covid has exacerbated the situation. Tenants can believe that by simply walking away the landlord is powerless. For some this might be true, as the Landlord has to be sure that chasing after an errant tenant is going to be fruitful. This means the Landlord needs to know his tenant and understand their financial position – both from the perspective of income and potential assets that could be claimed against in order to recover what is owed. There’s no point spending hours and potentially thousands of pounds on solicitors, court fees and bailiffs if the debtor has nothing to recover against.

What rent recovery options now exist for a Landlord?

In March 2020, the Government took action to protect tenants – both commercial and private, by restricting Landlords in the actions they could take to recover unpaid rent or evict.

The Coronavirus Act 2020, saw the introduction of several measures including the use of winding up petitions and statutory demands, where corporate tenants were concerned, and a series of measures restricting private landlords evicting their tenants. These have since been lifted, allowing landlords the right to explore all measures available to them.

For commercial landlords, the following options are now possible again:

  • Forfeiture. If a commercial landlord fails to pay rent, they are open to the potential for the landlord to make peaceful entry or the premises and take possession. No court action is required and they can change the locks. A tenant can still challenge this through the courts, provided they pay the arrears and costs of the landlord.Suspension of Forfeiture ended March 25th 2022.
  • Commercial Rent Arrears Recovery (CRAR). This permits a landlord in instructing enforcement agents to seize goods so they may be sold to recover arrears.Restriction of CRAR was lifted on March 25th 2022.
  • Statutory Demand. A solid method for debt collection, whether rent or unpaid invoices. This is the initial step prior to legal action such as a winding-up petition.The ban on Statutory Demands was lifted in October 2021. However, Winding-up petition restrictions interfered with this.
  • Winding-up petitions. A court application to force a debtor into compulsory liquidation. Also used to establish insolvency if the demand has not been met within 21 days of issue.Restrictions were lifted on March 31st 2022.

Check out an earlier post on recovering commercial property rent here.

For private landlords:

Eviction notice periods are now back to pre-pandemic levels. In other words, whatever is set out in your rental agreement.

However, due to the backlog of cases going through the courts caused by the court suspensions, Landlords may now have a bigger task on their hands as tenants may have continued non-payment while court dates are met.

The current economic climate will likely make matters worse for Landlords

energy price increases make rent payments harderThe cost of energy is having a serious impact on families and businesses. In fact, energy companies have warned the government that up to 40% of people in the UK could fall into fuel poverty, especially now that rate caps have been lifted. For some, particularly those who rent their homes, stark choices loom – how to pay for fuel and pay their rent.

Naturally, that leaves private landlords, once again, in a dilemma as to how to handle non-payment of rent. While the Government is trying to offset some of the energy cost increases for the poorest families, it leaves others in limbo and at the mercy of their landlords with rent is concerned.

While the financial matters of tenants are not the principal concern of landlords, Landlords need to be prepared as price caps will increase again in October. This means that some families may see their energy bills double or triple from their original levels. At this point it is too early to speculate what measures the Government will take to protect renters from the financial hardships such price increase will bring, but given what we have experienced with Covid, it’s not too hard to see that Landlords may once again suffer.

Foys Solicitors, helping landlords and tenants resolve disputes

Foys have been assisting commercial landlords and residential landlords in and around Doncaster, Sheffield and Rotherham, resolve their differences for many years.

We understand the pressures both landlords and tenant are under and help parties come to amicable agreements. In circumstances where this isn’t possible, we assist by providing legal support and bring the case to a conclusion through the courts.

Call us today through the local office nearest you to discuss how we may help with your landlord or tenant issue.

covid-19 regulations for landlords

Everything commercial landlords should know about COVID-19 regulations

Everything commercial landlords should know about COVID-19 regulations

COVID-19 has had a huge effect on every industry but there can be no doubt that commercial landlordism has been dealt one of the toughest hands.

While many have talked of the damage towards retail and businesses that require the use of physical locations, what is often forgotten about is the systems and industries connected to these businesses – particularly commercial landlordism. With businesses lacking business and customers, the weight of the financial burden has been passed onto commercial landlords who have seen their powers to take legal action on tenants stymied by government intervention.

As well as landlords servicing the retail industries, it has also impacted upon those who are leasing to hospitality and manufacturing businesses, too. As such, it has never been more important for commercial landlords to be clued up on how they deal with tenancy issues brought on by the pandemic.

The regulations that you need to know

Aside from the regulations that all commercial landlords need to be aware of, the COVID-19 pandemic saw a new raft of measures brought in to try and help tenants in trouble. This started with Section 82 of the Coronavirus Act 2020 which set guidelines on how landlords should respond to tenants in arrears as well as the stopping on non-payment forfeitures.

Essentially, this stops landlords from being able to get back in control of their property from non-paying tenants until at least 25 March 2022 when the current restrictions end. This is also when the Commercial Rent Arrears Recovery (CRAR) process will resume to some level of normalcy.

Currently, due to measures brought in with the Taking Control of Goods and Certification of Enforcement Agents (Amendment) (Coronavirus) Regulation 2020, tenants can have arrears lasting up to 554 days as opposed to the one week of allowance before the pandemic hit.

Statutory demands (when a formal demand is written to a debtor) and winding up petitions (when legal action is taken by the creditor against the debtor) were also curtailed under the current legislation. While the rulings on statutory demands have now been lifted as of October 2021, winding up-petitions remain unavailable as an option until 31 March 2022.

One key thing has shifted in this process is that the level of debt required for such action to be taken has changed. Previously, the debt had to be above just £750 to be actionable. Now, it needs to be over £10,000. Stay of possession has also been resumed under the current regulations. However, the legal quagmires presented here mean that you need to engage with experienced legal representatives – such as our Commercial Property Team at Foys – should you want to examine how you can take action against a tenant.

The Government also issued a code of practice to be followed regarding commercial tenants and landlord relations which has now been replaced with a newer version as of November 2021. The code is based on the principles of “fairness, affordability, and viability”. The aim is to introduce a new arbitration process that is legally bound to help settle issues of rent debt following on from March 2022 as part of the new Commercial Rent (Coronavirus) Bill.

Commercial landlords left bearing the front

Currently, there’s not a lot that commercial landlords can do to alleviate this burden. Aside from the measures mentioned above, which will be rare due to many not having a tenant with arrears sitting at above £10,000 but rather many tenants sitting under that amount, one temporary measure would be to dip into rent depoists. As long as this is within the terms of the lease, it is possible for a landlord to do this.

Market valuation on retail properties is down so while selling a property may be a solution, do keep in mind that you are likely to be selling under value. An alternative solution is to re-purpose your spaces – particularly any vacant office spaces – to serviced units for freelancers and small businesses to rent out in a shared office.

This requires you to contract or employ some basic staff for the front desk, janitorial and custodial work, but it has proven to be a fruitful endeavour for many who have taken it up. With so many people still working from home, but pining for any opportunity to get out of their house, many will look to this as their way to have a workspace away from their private life and the many distractions it offers.

Then there’s the opportunity to change the type of lease you are offering. You could choose to maintain it as a commercial lease but change it so that the amount paid per month is dependent on the tenant’s turnover. This means that if your tenant performs poorly, you can at least expect a set amount a month that you can always budget for while offering them a chance to recover.

On the flip side, a tenant performing well can offer returns exceeding the rent you would have expected from a standard lease. With the tenant being profitable, they are unlikely to complain either knowing that they will not be financially punished in future for any bad periods.

Lastly, there is the possibility of – if possible – converting the property into residential housing. As residential housing is never a market lacking in potential tenants, you have the ability to claw back some of your lost revenue over time from the struggles of your commercial operations.

Strained relations between commercial tenants and landlords

There can be no doubt that the current situation has further exposed an already weak point of commercial landlordism: relations to tenants. This has been an area that has already needed dramatic improvement. The problem even led to a new representative body for commercial tenants – the Commercial Tenants Association (CTA) – being set up in early 2021. A survey by the CTA found that about 75% of tenant respondents were not satisfied with the treatment they received from their landlords.

Check out our article on creating better relationships between landlords and commercial tenants here

The pandemic has only served to worsen this issue which is probably why the government has leaned so heavily in the new guidelines on the principle of fostering better relations between the two groups. As with any negative situation, there is always the potentiality to turn it into a positive one. And, in this case, perhaps that is the possibility of better tenant and landlord relations in the future.

Open and honest conversations between both parties can surely not only help the two reach conclusions and agreements that suit either participant, but can avoid expensive legal routes, too. Nevertheless, a rift remains on how both parties want the situation to go. A government survey showed that 50% of landlords and tenants believed that their counterpart was not following the spirit of the guidelines.

While the survey showed that most landlords wanted the protective measures to end sooner than March 2022, this was the least preferred option (from a total of six options) by tenants. Conversely, most tenants wanted there to be a binding non-judicial adjudication process and this was the least preferred option by landlords – again indicating the schism between the two.

The government has made its decision and the way forward should be a more collaborative approach to solve any issues surrounding arrears. However, should you suspect that your tenant is not being completely honest about their financial picture, you may want to take further action.

Foys is here to help guide you through Covid and Landlord issues

It’s going to take a lot of deft legal acumen and experience to navgiate these uncharted waters as we approach the March 2022 date which will undoubtedly unlock a flurry of legal action. It’s why you need a great commercial solicitor on your side such as Foys.

We have acted for landlords and management companies in all sorts of cases relating to leases and property disputes for over 50 years now. While the COVID-19 pandemic has presented challenges to our team as we also come to grips with so many temporary (and, now, permanent) changes to the law, we have taken the negative and honed our skills to produce positive outcomes for our clients.

It has, arguably, never been more important to have an experienced team of commercial property solicitors on your side when dealing with these issues. With the courts facing delays, you’re going to want to be ready to go with any legal challenges come March 2022.

At Foys, we don’t just get our clients the decisions and outcomes in their favour, we also help them understand the issues at hand so they know what to do going forward. We have always prospered and adapted as the legal landscape changes and our can-do attitude is well-suited to commercial landlords with the same outlook.

Our legal advice is always on point, actionable and accurate on all matters relating to commercial properties and conveyancing. And you can get a taste of what you can expect with a FREE initial consultation with one of our Commercial Property Team to discuss your legal concerns. So get in touch with our team today on 01302 327136 or by email us at, alternatively, complete our Contact Form.

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Book an initial FREE consultation or to find out more about our personal and business law services

Call the office nearest to you and speak to one of our professional specialists or fill out the form below

Building better landlord relationships with commercial tenants

How commercial landlords can create better relationships with their tenants

One key to running a successful commercial landlord based business is in having good working relationships with your tenant.

Building a good relationship with your commercial tenants can not only reduce the amount of legal headaches that come your way every year, but may even benefit your annual revenue, too.

There is a stereotype of landlords as dispassionate or uninterested in their tenants – particularly due to the reported experiences of many with residential landlords. However, as with any walk of life, there are good and bad landlords and that is equally true in commercial landlordism.

While it is always possible to easily find new, short-term tenants for residential properties, thus reducing the necessity for even having relations at all, commercial landlordism should be all about forging relationships as many leases (as well as the financial benefits) are longer-term.

Landlordism in the UK today

The COVID-19 pandemic has led to many commercial landlords having to reassess their portfolio and relations with tenants as government legislation has hampered their ability to reclaim lost finances or even properties from tenants. As matters start to resume some normalcy, freeing landlords to take legal action again, there has never been a more important time to also reassess how you handle your tenants, too.

The Commercial Tenants Association (CTA) was launched in 2021 to represent commercial tenants – many of whom are unsatisfied by their landlords. However, these issues aren’t just stemming from the financial strain caused by the pandemic and lockdowns; rather, they are longer-standing issues that have been prevalent in UK landlordism for some time. COVID-19 has just served to further expose the weakness of landlord-tenant relations.

Of course, relations with your tenants isn’t exactly the only thing that makes a good commercial landlord. Knowing where to buy a property, finding the right location, knowing the right type of tenants that would be happy with the property for a longer period and consulting the right professionals are all very important aspects, too.

After all, as aforementioned, it’s all about the long-term with commercial landlordism given that an average lease can last between 5-10 years which, again, really does highlight why you need to take a different approach when it comes to commercial landlordism versus residential landlordism.

You should see good tenant relations as the proverbial ‘cherry on top’ of your landlordism. It could be the difference in keeping and losing a good tenant when they are faced with the possibility of moving. There is no guarantee you will get a better or equal tenant so maintaining relations, especially with loyal tenants, is so crucial to solidifying any revenue gains.

How to create a better relationship with your tenant

Experienced commercial landlords are not strangers to being left with no choice but to pursue legal action if a problem occurs with a tenant. However, because this is all we hear about, this is what we come to expect commercial landlordism should look like. As with anything in life, it’s the negativity that is always talked about or highlighted and rarely the positivity.

When was the last time you heard a news story about a commercial landlord and a tenant celebrating 20 years as business partners? The good stories about landlords are almost always never highlighted. This helps create the view that commercial landlords and tenants cannot trust one another.

One of the better ways to push back against this narrative is to go down the road of fostering good relations. It’s rarely mentioned in any commercial landlord guides, with more focus spent on location, legalities and bureaucratic tactics (which are nevertheless important), but landlord-tenant relations can be important in securing your long-term future as a commercial landlord.

This is a factor that should absolutely be taken seriously given the COVID-19 situation displaying how necessary it is for landlords and tenants to be able to work together to resolve a dispute rather than going down more expensive legal avenues.

The relationship process must start with a good, strong lease. Ideally, one that has been tailored specifically to the landlord and the tenant’s liking. Directly involving the tenant in the process can really be key in cementing a good, long-standing relationship as it shows you are open to their needs.

This is important as if a tenant comes into financial difficulty, a relationship will help your tenant feel more comfortable in breaking the news to you and allow you to prepare in advance for any financial setback, as well as work with the tenant to create a payment plan for any debts.

On the contrary, a poor relationship with a tenant will increase the chances that you will suddenly and unexpectedly be staring at a bank account figure sans a month’s rent from one of your properties. Fairly soon afterwards, the legal letters will begin to fly. Which of the two scenarios sounds more preferable – emotionally and financially – to the landlord and the tenant?

But, even before things get that far, it’s also important to perform rigorous vetting of your potential tenant – such as credit checks. If it’s a new business, ask to see the potential tenant’s business plan. If it’s a pre-existing business, ask for any additional business information or expectations on foot traffic. It also helps to know your property so your tenant can get the most out of it.

This also ensures you don’t slot the wrong tenant into the wrong property. If they do not find success at your property, you will soon be left without rent on a location that could be empty for months – as well as the probability of having to enter into commercial dispute resolution, or having to take expensive legal action against your previous tenant.

A collaborative approach can really pay dividends in the future – especially if the tenant is consistently covering their rent every month and offering you good, long-term rent and revenue security. Also, having a collaborative relationship allows everyone to know where they stand. A tenant will know their lease inside-out, as opposed to it being a generic legal paper, thus reducing the chances of miscommunication.

Ensuring you fulfil your end of the deal is important to building these relations, too. Maintenance and safety checks should be performed with regularity and you should always be readily available to your tenants should they have an issue. After all, if your tenant has an issue with the property, that could soon spiral into a financial issue for both of you.

How better relations can benefit commercial landlords

The most obvious benefit is that performing all of the above can lead to better quality tenants who are more likely to keep up their payments and who are more keen to communicate problems instead of letting them fester until they become an expensive legal matter.

A tenant who has good relations with you is more likely to treat the property with respect and care which, of course, ensures that it is kept in the best condition possible should it need to be put on the market at short notice. A property left in poor condition by a tenant will require extra maintenance and repairs which costs money and time.

It can also benefit you in other ways that often aren’t always immediately apparent. As well as providing you with the best possible revenue, a long-standing tenant who sticks around at a property will also bolster the value of the property. Evaluators are always keen to see previous tenants as this will absolutely factor into the value of the property. If you’ve had a long-standing tenant in place, it suggests satisfaction with the property and that it is conducive to delivering profits.

It’s also a great way to snag other quality tenants, too – either for the same property or as an example of your productive landlordism when you are looking to attract a potential tenant for another property in your portfolio. This is especially great if you have multi-property building that can house multiple tenants and allows you to introduce potential tenants to pre-existing, happy tenants who they will be sharing their space with. It’s a great way to close a deal.

This attentiveness also allows you to assuage any possible clashes that may arise from tenants sharing the same space in a building/complex as they may offer similar services to a new tenant. There is almost assuredly going to be no problem if they are both law firms, but there will be a problem if they are both restaurateurs serving a similar cuisine!

And, lastly, it also reduces the chances of commercial landlords having to take legal action against their tenants. As we mentioned before, a collaborative approach to drafting a lease allows for each party’s positions to be clearly delineated, thus reducing the chance of miscommunications arising.

A breakdown in communication between tenant and landlord can spiral into rent arrears, legal action, statutory demands and even winding-up petitions. This is not productive to either party and should be avoided at all costs. But, if it is necessary, it is important to have a good commercial solicitor on your side.

You might also be interested in our Commercial Landlord Guide for those thinking of becoming a new commercial landlord

Put your trust in Foys

Should their be such a breakdown in commercial landlord-tenant relations, it’s important for either party to seek proper legal guidance. Foys’ experienced and dedicated Commercial Property Team has been providing our legal services to commercial landlords and property management companies for over half a century now.

As well as helping you navigate any potential legal action that you are either pursuing or are on the receiving end of, we can also draft excellent, watertight leases. This is something that can be incredibly important down-the-line when it comes to winning any possible legal case. Conversely, we can also help commercial tenants understand their rights when challenged by a landlord as this is an area that the majority of tenants do struggle to understand.

Our skilled team not only have the legal acumen to grasp the complexities of commercial property matters, but they are courteous and understanding of the stress and strain such matters can cause you. We will champion your case and help you reach the best possible outcome.

That’s exactly why we offer new clients a FREE initial consultation so that you can experience the quality of our commercial property solicitors first-hand. This allows you to explore your legal options free-of-charge so that you can make an informed decision on how you want matters to proceed. To book your consultation, simply get in touch with Foys today by giving us a phone on 01302 327136 (or the office nearest you), email us at or complete our Contact Form.

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Book an initial FREE consultation or to find out more about our personal and business law services

Call the office nearest to you and speak to one of our professional specialists or fill out the form below

Preparing commercial landlords for the end of furlough

Preparing commercial landlords for the end of furlough

Commercial landlordism has taken, and will continue to take, a huge hit as a result of the COVID-19 lockdown. But instead of burying your head in the sand, you should be thinking ahead to how you’re going to manage matters in a post-furlough world.

Despite the recent extension to the furlough scheme of March 2021 offering some reprieve for businesses and, ultimately, landlords everywhere, it has only bought companies another month to plan ahead. Case numbers are going down but they are still nowhere near pre-lockdown levels.landlords emerging from furlough

While the UK government may have no choice but to further extend the furlough scheme past the end of April 2021, there’s absolutely no guarantee that this will happen. That means commercial landlords, in particular, have a short window to get their business in a prime position to survive.

Stats from the Centre for Economics and Business Research say that the lockdown is costing the UK economy £521m per day, has seen 6 million workers placed on furlough and has cost us one quarter of our total businesses. These figures should be enough to scare any landlord into pre-emptive action because, ultimately, it’s commercial landlords who are going to face the brunt of the fallout.

Why no furlough is going to be difficult for commercial landlords

While not every commercial landlord will be affected, the chances exponentially increase for companies that have the most properties. While the furlough scheme is keeping many businesses afloat while they either run reduced hours (or, in some industries, no hours at all), the stop in support is going to cause a cash flow shortage that may not be made up by customer demand.

While we’re all looking forward to the end of restrictions, a drop of full social distancing restrictions is still likely to be far off and, as such, customers aren’t going to return in droves to commercial properties anytime soon. Those running retail shops are almost assuredly going to see a drop in footfall compared to the pre-pandemic times; whereas those renting office spaces will see businesses realise that they can save money by having staff work at home. You may already have had to deal with this problem.

So weather it is driven by money or need, there’s a good chance you’re going to start seeing a lot of customers try to change or question the terms of their lease once the furlough scheme ends. It’s why good legal representation for commercial landlords is going to be so important going ahead.

What you currently can’t do as a commercial landlord

The situation is made more difficult by the fact that commercial landlords are facing restrictions on what they can and cannot do when a tenant can’t (or is refusing to) pay rent.

A number of laws have been temporarily changed to give renters more protections against legal action by landlords over non-payments. These include the Coronavirus Act 2020 – which stops landlords from pursuing forfeiture in the result of no payments by tenants – and restrictions on winding up petitions brought about by the Corporate Insolvency and Governance Act 2020.

Even if you can get a tenant to court after the required six months’ notice, a judge is likely to throw the case out if the tenant can demonstrate that their business has been impacted by COVID-19. As almost every business in the UK has been affected, this makes the court route a legal improbability for landlords right now.

In addition to all of this, there are also regulations in place on Commercial Rent Arrears Recovery (CRAR) that requires tenants to have accrued over 365 days of outstanding rental debt before any action can be taken.

There can be no doubt that many tenants are undoubtedly running businesses that are struggling. However, many commercial landlords are finding that tenants who were a problem before the pandemic when it came to payments are now bringing them even more hassle as they take advantage of these temporary measures to operate largely rent-free.

What the future holds for commercial landlords

With so many of the cards stacked against commercial landlords right now, it’s important to take a step back and look at what can be done once the furlough scheme ends.

One positive to take away from the furlough scheme’s end is that it will likely correlate with the end of the temporary restrictions on what legal action can or cannot be taken against non-compliant tenants. Without many of these protections in place, you’ll be free to tackle the worst offenders once again.

It’s also likely that you have seen or will see tenants try to change the terms of their lease or even reduce how much space they rent. With many businesses now giving their employees the choice or working from an office or working from home, it’s undoubtedly going to reduce the amount of space that tenants need.

One upside from this situation is that social distancing measures ensure that there still needs to be sufficient space between desks so this may not be such an immediate problem for commercial landlords. In fact, some businesses that utilise a large amount of employees in a small amount of space – such as call centres – may even be forced to increase the size of their rental space to continue operations.

Additionally, it’s also very likely that we’re going to start seeing bigger businesses look to operate less centralised offices and instead move to smaller, regional offices – another possible opportunity for those with such properties in their portfolio. And there is also an opportunity for renting out smaller offices or even desk space as people look to escape from the chaos and noise of home working.

Regardless of these positives, it’s likely that you’re going to see more tenants try to hold out on payments for as long as possible and you need to be prepared with the right mentality that comes from having smart legal minds at the other end of the phone that you can rely on.

Taking proactive steps

Despite all these negatives, it’s important to maintain a sense of balance throughout it all too. Many people and businesses are struggling right now. While the temptation to relentlessly pursue tenants is strong, there’s a lot to be said for a more compassionate approach as a way of building loyalty and trust with your tenants.

People are far more likely to work with you and by sympathetic to your concerns if you can show the same approach in your communications with them. A more discerning approach to how you talk to your tenants is certainly going to be key in how cooperative they will be in helping you back by paying rent when they can.

One proactive step that can be taken right now by commercial landlords is to start thinking about revising the fine print in your tenancies. We’re going to see more tenants seek out more flexible terms once their tenancies end – such as shorter leases and clauses centred around allowing tenants to back out under certain conditions. How you navigate these areas is going to have an impact on the likelihood that your tenants are going to stay with you or move onto a landlord who is giving them a more flexible deal.

It’s also important that you have protection in place once the temporary measures and furlough end. Make sure you have rent guarantee insurance in place to ensure that you can distribute actionable section 21 notices when you are able to do so again.

Foys can help you navigate these tough times

One last factor that is going to determine your company’s outcome is the strength of your legal representation. From the pursuit of late or non-payments from tenants, to the drafting of new template leases, you need solicitors with the experience, flexibility and strategic know-how to be a beacon in these dark times.

There’s no question that our experienced commercial property solicitors are exactly who you can trust and rely on. Our team assists across a wide range of commercial property matters – with a speciality in resolving issues between landlords and tenants.

We will not only offer you clear and consistent legal advice that cuts across the lines of jargon, but we can draft new leases to suit these differing times and help you end disputes with your tenants through proactive mediation and clear communication. Our goal is always to get the maximum gains possible for our clients without the need to go through expensive court proceedings.

Additionally, we can help you in matters of asset management and property refinancing which may well be an increasingly important area for commercial landlordism during these tough times ahead.

Our goal at Foys is to ensure that our clients feel safe in our hands and that they know that someone has got their back and best interests at heart when dealing with these difficult matters – and someone who they can trust to give the right advice at the right time.

We provide all of our first-time clients with a FREE initial consultation so that you can have first-hand experience of what it’s like to be part of the Foys family without paying a penny. To start experiencing quality legal advice you can trust as soon as today, just get in touch with Foys’ Commercial Property Team today by phoning us on 01302 327136 or by contacting us via our Online Form.

landlord questions

How to ask prospective tenants the right questions

How landlords can ask prospective tenants the right questions

Landlords quite naturally want to learn as much about a prospective new tenant as possible. However, you need to be careful as to what questions you ask.

As specialist property solicitors, we hope that this post can help steer a landlord’s questions tactfully in the right direction. While this post is largely aimed at residential landlords and tenants, many of the questions and certainly the approach could be used for commercial landlords too too, especially small business landlords.

It might be a bit of an understatement, but being a landlord at this time comes with its fair share of risks as a business venture. The biggest risk though is in finding the right tenant.

What are you looking for in an ideal tenant?

Most landlords are simply looking for a tenant who is going to repeat the property, look after it and pay their rent on time.

The driver for this maybe the basis upon which you, as a landlord acquired the property and what you aspirations are in this field. For instance, maybe you acquired through inheritance and, rather than sell it, want to see a return. As part of your family’s ‘estate’, perhaps even your child-hood home, you want it to be respected. Or, you may have decided that now is the right time to explore buy-to-let. In which case, you will have a mortgage to pay and so regular payments are essential.

The point is, at some level, it is personal to you and should things go wrong, the costs (to varying degrees) will be yours to bear.

To kick off your search, write down the criteria you think your prospective tenant should fulfil. These might include the following:

  1. A good tenant track record
  2. A solid job, steady employment history
  3. An income that is a good multiple of the monthly rent
  4. A good credit score
  5. A stable lifestyle
  6. Pets / no pets?
  7. Good employer references

It helps to have a good dose of realism too. Naturally, if you are too picky, you may never find the right tenant, so tradeoffs are inevitable, but it is something that should be thought through carefully and examined in detail.

What kind of questions should you not ask a prospective tenant?

If you are a naturally chatty or inquisitive person, you’ll probably want to engage your prospective tenant in a casual and friendly manner, rather than in a more formal manner kind to a job interview.

Doing so though, it’s easy to fall into the trap of asking questions that are taboo or grey areas, even though quite innocently. This may put make the prospect somewhat sensitive and suspicious. After all, at this point, you don’t really know them or what they may be hiding, especially as property fraud is a very real problem in today’s markets.

So here are some recommended areas to stay away from:

1. Avoid asking questions about a tenant’s place of birth, as these can be viewed as discriminatory.

2. Don’t ask if a tenant has kids.

3. Avoid questions that hide their real intent, such as asking about local amenity needs – e.g. churches, mosques, etc.

4. Don’t ask about criminal convictions

5. Marital status

6. Age-related questions

7. Disability needs

8. Direct questions regarding your cash situation

9. Service animals

Many of these, such as enquiring about service animals, look like legitimate questions, however, they could be viewed as discriminatory.

So, what are the right questions and how should I ask them?

It’s not what they say, it’s what they don’t say that can give you the clues you need and insights into whether they will be a good tenant.

While still be somewhat guarded, honest tenants will want to help you come to the right decision in your decision quest to find a tenant. They will want to display a level of ‘openness’ to help show you who they are. Therefore, any prospect that appears over defensive and seems reluctant to engage in conversation is probably one you should avoid.

One way to get a good insight is by getting a prospective tenant to talk about themselves and their circumstances openly. Invite them to tell you about themselves. Ideally, as a landlord and if you are managing the property yourself, you need to have a friendly working relationship with your tenant. When information is offered openly you may avoid many awkward questions. It shows a level of engagement that may be important in maintaining a good working relationship.

Overly-talkative people though could signal another danger. Although they may be naturally talkative, it can be a warning sign, as they may be trying to cover something up by trying to give you too much somewhat irrelevant information.

What conversation trigger questions could I use?

Any prospective tenant is going to expect the landlord to ask some challenging questions – it’s only natural.

Showing genuine interest and being openly honest about your intentions is always the best policy. If you don’t behave this way, it invites a similar approach by the prospective tenant. Typically, these are ‘open questions’. Questions that can’t be answered with a yes or no, tend to prompt the prospect into talking about themselves. Also, try to about questions that start with ‘why’. Why? Because it naturally suggests you are asking the person to justify themselves and tend to confer an element of negativity in the question. We’d suggest trying the following open questions:

  1. What is your ideal rental? Continue the questions about themselves.
  2. What has prompted your move? Break the ice and get them talking about themselves.
  3. How familiar are you familiar with this area? Here, you are looking to get an insight as to whether they have roots in the area, such as family and friends that may help understand if they will stick around.
  4. What has attracted you to this area? Many things about your area may give insights into the prospect’s lifestyle that may be desirable or less so.
  5. What other properties have you viewed and how many more are you likely to see before making a decision? Are these genuine renters and are they likely to just be a waste of time.
  6. How long have you been renting for? Are they a long-term renter or is this to see them through until they purchase. Are you as a landlord looking for long-term renters.
  7. How are you finding the levels of rents in the local area? This may uncover more about their suitability and ability to afford your property long term.
  8. Tell me a little about the type of work you do? Do you enjoy it? A happy employee is a stable employee, at least from their perspective. Once you know who their employer is, something you’ll need anyway for references, you can check with Company House to get an idea of size and relative stability. You can also do a Google search on the company to see if there is any negative news on it.

Here are a few more questions that are a little more direct but perfectly legitimate include:

  1. How long are you looking to rent for?
  2. Where do you work?
  3. Will your previous landlord provide a written reference?
  4. Will your employer provide a reference?
  5. Have you ever broken a rental agreement?
  6. What is your income?

Lasting relations are built on good intentions and honest actions.

Just as you are looking for the right tenant, prospective tenants are looking for the right landlord. There are too many horror stories out there about unscrupulous landlords and bad tenants.

Remember too, that the tenant needs to be comfortable too and will want to ask you questions about the tenancy and what they can expect from you, such as keeping the place a safe and pleasant place to live, especially if they have children.

So, when interviewing a prospective tenant, maintain a balanced and open approach to the meeting. Take care in answering the prospect’s questions with the same level of attention as you would like given to your own questions answered.

For all your landlord and tenancy agreement needs and concerns, feel free to call Foys and discuss how we can assist.

This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues. Also, please note that although we may use the word solicitor, your case could be carried out by a legal advisor, legal executive or paralegal depending on the nature of the case.

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Commercial Tenant Disputes

How to resolve a commercial tenant dispute

How to resolve a commercial tenant dispute

Learning how to deal with tenancy disputes swiftly is vital for all commercial landlords, but call the Commercial Property team at Foys if you have questions.

Being a commercial landlord has a number of great benefits and the chief motivation is to earn an income while your property continues to accrue value. But when disputes happen, you need to resolve them quickly and efficiently so they won’t escalate to something that will cost you more time and money. In this guide, we aim to highlight how you can resolve a commercial tenancy dispute, but for further information and sound legal advice based on years in successfully resolving tenancy disputes, please contact our Commercial Property team at Foys Solicitors.

Common types of commercial tenancy disputes

When a dispute happens between a tenant and a landlord, it is almost always as a result of a clear or perceived breach of the tenancy agreement. A tenancy agreement is a written contract between the landlord and the tenant that details the rights of both parties in regards to the occupancy of a property. An agreement will include details as to the obligations of the landlord and of the tenant. The agreement also covers arrangements such as who has the right to occupy the accommodation during the tenancy, how much rent a landlord is expected to receive from a tenant and how long the tenancy will last.

A tenancy agreement can be breached for a variety of reasons, of which the most common are as follows:

1. Unpaid rent (rent arrears)

When a tenant fails to pay their landlord the agreed rental fee on time, it’s called rent arrears and is always a cause for concern. There may be a number of reasons as to why the tenant has not made a payment, so it is best practice to notify the tenant and give them the chance to rectify it. However, if the tenant still doesn’t pay, the next step would be to send a formal letter outlining that they are in rent arrears and that you expect payment by a certain date.

Should you not receive the payment by this date, it is best to give our team a call at your local Foys office, as the next few steps involve formal letters to the tenants and also the guarantor (if any). One of these letters will confirm your intention to take legal action if the rent isn’t paid.
If the tenant continues to ignore you, we will help you take action to reclaim possession of your property, before going to court.

2. Sublets

An increasingly pervasive problem (particularly within cities) is subletting. A sublet is when a tenant rents out a room within a property that they themselves have rented from their landlord. The sub-tenant has no legal relationship with you the owner/landlord and will pay their rent to the tenant. While not necessarily an illegal act in of itself, subletting is something that can be a breach of the tenancy if the agreement expressly forbids any sublets.

Subletting can lead to complicated issues. For example, a sub-tenant may damage the property and the tenant is ill-prepared to remedy the issue with you the landlord. Don’t put yourself in this situation, talk to one of the expert commercial property solicitors in our team so we can help you create a tenancy agreement that makes your position on subletting clear.

3. Dilapidations

In every commercial tenancy agreement, dilapidations outline which party is responsible for maintaining and repairing the property. Disputes surrounding dilapidations are common as most commercial tenants tend to make alterations which are unwanted by the landlord.

If your tenant doesn’t believe that it is their responsibility and won’t cooperate with you on this matter, talk to us as we have experience in handling disputes relating to dilapidations.

Resolving a dispute

No matter what the nature of your dispute with the tenant, it is always wise to resolve the dispute quickly and efficiently so it won’t escalate to something that will cost you more time and money. Here are four common ways which you can use to resolve the dispute.

1. Get in touch and talk it through

The most important first step is to get in touch with the tenant regarding the problem. Try to talk through the issue and see if it’s possible to reach some sort of agreement or compromise over the issue. If no such agreement can be made, draft a letter that covers the problem, what it would take for you to reach a resolution with the tenant and invite them to respond (in writing) by also stating their respective position.

The letter should be professional and must not sound aggressive or contain threats, regardless of how unreasonable you feel the tenant is being. Once the letter is sent and you have (or haven’t) received a response, you should now decide your next step and how you want to exit from the dispute.

2. Mediation or arbitration

If reaching out to your tenant has not worked, the next sensible step is to involve an independent and impartial professional who is trained and qualified in conflict resolution. This person, also known as a mediator, offers a cheaper and faster alternative to going through the courts.

Mediation can take place face-to-face or via a conference call so the mediator can facilitate conversation and resolution from both parties. If an agreement is reached, the mediator will note this agreement in writing before sending this on to both parties for signature to make it legally-binding.

Instead of mediation, some tenancy agreements may state that certain tenancy disputes should be dealt with by arbitration, involving an independent person (known as an arbitrator). The arbitrator will listen to both sides, review the evidence, decide who should be responsible for the breach and who should be liable for any costs. The decision made by the arbitrator is called an award and it is legally binding. Once the decision is reached, you cannot take the case to court to get the decision changed.

Before going down the route of independent mediation or arbitration, it is essential that you have one of our experienced commercial property solicitors working with you to ensure that your rights as a landlord are respected and the clauses in your tenancy agreement are interpreted correctly.


If the dispute concerns rent arrears and you know the fixed amount, you can apply for a court order on, a portal designed to facilitate the claim process. After submission, the court will issue a claim pack to the tenant (now known as the defendant) within two days. And after five working days, the claim pack will count as served on the defendant. Once the claim pack is counted as served, the defendant has 14 calendar days to respond, which can be extended to 28 days if they file an acknowledgement of service.

If the time elapses and the tenant continues to ignore you, you may now request a judgement in default on the moneyclaim website. If you are in this situation, get in touch with a solicitor like Foys as you must choose your options carefully before proceeding to enforce judgements. We will review the case with you before advising on the moves that aim to maximise your chance of success while minimising your costs.

4. Eviction

If you are thinking about eviction, talk to a solicitor first as eviction may or may not be suitable. To an extent, what you can do depends on the tenancy agreement too.

Foys can help to resolve your tenancy dispute

Since 1972, Foys has provided a valued service to commercial landlords across South Yorkshire, North Nottinghamshire and Derbyshire. We have a highly skilled, professional commercial property team who takes pride in their ability to understand the complex laws surrounding commercial property ownership and leasing. We use our knowledge and expertise to help our clients to make better decisions for themselves.

If you have an unresolved issue with your tenants, or if you need to draft a commercial tenancy agreement that protects your interests, speak to one of our experienced commercial property solicitors today.

This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues. Also, please note that although we may use the word solicitor, your case could be carried out by a legal advisor, legal executive or paralegal depending on the nature of the case.

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Landlord unlocks the house key for new home

Top five most common questions asked by commercial landlords

Top five most common questions asked by commercial landlords

Being a landlord has a lot of responsibility, and you may be worried about what legal obligations you have. At Foys, our commercial property solicitors offer expert advice and answer five of the most common commercial landlord questions.

Whether it’s an office building, retail store or leisure facility, a commercial landlord is a business owner with many responsibilities. These responsibilities will differ from those associated with renting out a residential property. Generally, you will have a duty to ensure your premises are well-maintained, secure, safe and healthy places for people to operate.

Being a commercial landlord offers you the potential for long-term and stable income, as well as an opportunity for capital growth. To make the venture successful, it is best to have competent legal advice and this is where Foys come in.

Foys can review your lease with you and discuss the practicality of becoming a successful commercial landlord. In this post, our expert property solicitors answer five of the most common questions asked by commercial landlords.

Here are the most common questions asked by commercial landlords:

Am I responsible for the maintenance of the property?

This would usually be laid out clearly in the lease. Generally, tenants should keep the premises in good condition and take responsibility for any damages incurred (dilapidations). However, if the tenant is only renting out a space within a larger property owned by a landlord, the landlord may be responsible for the overall functionality of the building itself.

Typically, a landlord is responsible for maintaining the general upkeep of a commercial property, making repairs when necessary. This could be fixtures and fittings found therein. It is very important that you lay out what duties you have in the lease. A good lease determines your rights and responsibilities and gives you protection in most situations. If any potential disputes arise over maintenance, it will be a good point of reference to make your case.

Some tenants will take on a Full Repairing and Insuring (FRI) Lease, and this means the tenant will take on all repair costs and insurance for the property. Normally, a tenant would survey the property before entering into such an agreement. This could act as a bargaining tool for the tenant, in the negotiation of the lease.

What other charges may I incur as a commercial landlord?

When you take on a commercial property, there may be other costs involved. Ideally your income from rent will cover these costs, but it is a good idea to keep money aside to cover any additional expenditures. These can include mortgage payments, letting agent fees (if you choose to outsource the management of the property), taxes, insurance costs (if outlined in the lease) and any legal and administrative fees.

The commercial property solicitors at Foys can advise a landlord on the risks associated with renting a commercial property, the types of insurance that make the most sense for the property and how to prepare for additional costs. We can help you decode all the legal jargon and lay-out the process of preparing a lease agreement that suits you and your needs.

What documents do I need to have as a commercial landlord?

There are several documents you need to be aware of as a commercial landlord. Some are required by law, and some are just good practice. They include an Energy Performance Certificate (EPC) – currently landlords are not allowed to rent out properties with a rating below E, any documentation associated with an accredited asbestos survey and gas and electrical survey certificates – given at the beginning of the tenancy and after each inspection.

Having a good tenancy agreement is also vital in determining what responsibilities you have as a commercial landlord. This will lay out who is responsible for maintenance and taxes and agree on rent and terms of the lease.

It is also a good idea to compile inventories for your property, so you know if anything is missing or damaged during the tenancy.

What other responsibilities do I have as a commercial landlord?

Depending on the lease, a landlord may be responsible for ensuring that health and safety regulations are met, including proper ventilation, water supply and cleanliness. If the property is in a state of disrepair, you may need to sort this out before it can be offered to tenants.

This also extends to fire safety. In the context of commercial properties, The Regulatory Reform (Fire Safety) Order 2005 (The Order) imposes various duties on the ‘responsible person’ – this can be the landlord or the tenant, or sometimes a combination of both. This can be carrying out risk assessments or ensuring emergency exits. A landlord may also need to provide a safety engineer and registered gas-safe engineer to check the property regularly. You may also need to provide tenants with a reliable fire alarm system and fire extinguisher.

Under what circumstances can I evict a tenant?

Occasionally, you may find yourself in a situation where you wish to take back the premises from a tenant – this can be due to rent being in arrears, damage or general disrepair, subletting the property without permission or being an annoyance to neighbours. It is imperative, however, that you follow the correct eviction process.

The Landlord and Tenant Act 1954 dictates that tenants of a business property may renew the lease and remain on the premises at the end of the lease term. There are some exceptions to this. If you would like to discuss the possibility of including or excluding security of tenure, you can contact Foys team of property solicitors, so you can legally decline to renew a lease.

A landlord who wishes to end a commercial lease must give the tenant six months written notice, and indicate whether they are open to a new tenancy agreement. There are strict guidelines for these notices, and it is recommended that a landlord consults a specialist commercial property solicitor, like those at Foys before they take action.

Foys can help commercial landlords

There are many groups and services that a commercial landlord can turn to for support and advice. Landlord associations and letting agencies may be able to help with the management of your property and offer assistance in dealing with tenants. However, when considering a commercial lease, it is always a good idea to get in contact with a reputed specialist commercial property solicitor. At Foys, we are the legal authority on commercial business matters in Yorkshire, Nottinghamshire and Derbyshire, and have over three decades of experience in offering excellent services to commercial landlords. We can advise you on insurance, taxes and tenancy disputes.

We know that hiring a lawyer can be expensive, so we offer a FREE initial consultation, where we can discuss your case and give you an idea of costs. To find out more, give us a call on 01302 327 136, or alternatively, you can fill out our Online Form.

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Commercial property solicitors

Commercial property solicitors

Commercial property solicitors

With the assistance of our experienced commercial property solicitors, advisors, conveyancers and more, you can rely on us for sound legal support and advice regarding commercial conveyancing.

As a commercial property owner looking to buy, sell or lease property, a good comprehension of transactional laws can ensure that you’re able to make the best decisions for your situation.

The commercial property team at Foys Solicitors is here to help you make those decisions. Our passion for helping property owners with their commercial property needs led us to update our commercial property solicitors page with reliable and trustworthy information.

On the page, you’ll find out how we can help you with:

  • Acquisition and disposal of freehold and leasehold property
  • Landlord and tenant matters
  • Asset management
  • Property refinancing: bridging loans, mortgages, legal charges and debentures
  • Business sales and purchases
  • Purchasing and selling business premises
  • Handling complicated renewals
  • Problematic disputes with commercial tenants

Contact Foys Solicitors commercial property team today

For a free initial consultation on our services and how we can help you, call us on 01302 327136, email us at or complete our Contact Form.

For those considering entering the commercial property world, take a look at ‘the complete guide to becoming a commercial landlord’.

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Dealing with rent arrears as a commercial landlord

Dealing with rent arrears as a commercial landlord

When a tenant falls behind on their rental repayments they are said to be in arrears. Typically, a rental agreement stipulates that rent be paid 30 days after the starting date. If a tenant has failed to pay the agreed-upon sum for 30 days after the rent was due, they are then one month in arrears, and so on so forth.

For all landlords, rent arrears are a business risk and a relatively common occurrence. For commercial property landlords, you would usually diligently vet the tenants to prevent the occurrence of rent arrears, but despite your best efforts, your tenant may fall into arrears as a result of cash-flow problems being experienced by the business. When rent arrears do happen, there are legal recourses that landlords can take to recover rent, interest and any costs incurred as a result of the late payment.

In this article, our specialist commercial property solicitors at Foys aim to discuss the various legal avenues open to commercial landlords whose tenants have rent in arrears and the best practices for exercising the options available.

Establishing rent arrears

First and foremost, a dialogue should be opened with the tenant to investigate the reasons for the late payment of rent. A notice should be provided in writing to advise your tenant that they are in arrears. This is also an important piece of correspondence should the situation escalate and you need to pursue debt recovery via a legal pathway.

While making contact with your tenant regarding the initial late payment is good practice, you are able to serve them with a mandatory notice after 2 months of rent arrears to demand payment. Depending on the circumstances, an eviction notice should also be prepared.

Avenues open for debt recovery

Upon establishing that your tenant is unable or unwilling to fulfil their contractual obligations, it’s best that you contact an independent commercial landlord solicitor who will discuss a number of legal recourses available that will facilitate a resolution – some more painless than others. The main things to consider before deciding on a particular avenue are:

  1. Whether you want to keep the tenant on board and are happy to negotiate or compromise with respect to receiving the full payment.
  2. Look into the tenant’s history and see whether they have been in arrears before.
  3. Is the outstanding debt considerable enough to warrant a pursuit by legal or other means?
  4. Will pursuing debt recovery drive the tenant into insolvency and therefore lessen the likelihood of you recovering your money in full?

Talking to our commercial property solicitors and weighing up these three questions will give you a better gauge of the suitability of the options available as well as a better understanding of which method will likely give you the best chance at recovering your rent and any interest in its entirety.

Payment agreement

If the tenant is able to convince you that their financial situation is only temporary, or you believe that given more time they will be able to pay you back in full, you can enter into a payment agreement with them which requires the payment of the outstanding amount in instalments.

This is the preferred option for commercial landlords who don’t want to ruin the relationship they’ve established with the tenant, but also want to receive what’s owed to them in full. This option should also be considered in areas where the rental market is not conducive to short-term lets and high tenant turnovers, so it may be in your interests to preserve the relationship when considering your long-term prospects.

It’s advisable that this payment agreement be drawn up by a lawyer so as to carefully outline the rent arrears is to be paid on top of the normal rental agreement. In the event that this agreement is reneged on, the landlord reserves the right to forfeit the lease.

Drawing down on the rent deposit

If the initial rental agreement included a rent deposit, the landlord is within their rights to draw from this deposit in order to recover rent arrears – as long as the lease contract stipulates this. The tenant must then top up the deposit within a certain amount of time. This is the best course of action for commercial landlords that require a quick recovery of outstanding rent – however, it is only a short-term solution, so if the tenant is in a precarious financial situation, it’s not always advisable.

Serve a statutory demand

If your commercial property is being leased by a company and owes more than £750, you’re entitled to serve the tenant with a written demand for payment. This document needs to comply with statutory requirements, but once served, the tenant has 3 weeks to pay before you commence legal proceedings against them for insolvency or winding up of the company.


In the event that rent has not been paid on time, usually for a period of between 14 and 21 days, a commercial landlord can “re-enter” a premises (when the tenant is not present) and change the locks – this is known as forfeiture. If the tenant is insolvent, then this is often the most economically viable option as it forces the tenant to pay up or face the potential loss of their business. Forfeiture is a tricky avenue to go down, so consulting an expert landlord solicitor such as Foys is always advisable – particularly if unsure of the rules surrounding this principle.

Pursuing a guarantor

If the tenant has a guarantor under the lease, then it is possible for a landlord to pursue them for the rent in arrears, rather than the tenant directly.


The Commercial Rent Arrears Recovery Act 2014 is a legislative attempt to protect the rights of landlords by enabling them to employ an enforcement agency who will assume possession of a tenant’s goods for sale in order to recover debt. This is a complex process that requires various notices to be served on the tenant, and certain conditions need to have been met before the repossession can occur. CRAR should be considered carefully as it can only be used to recover rent, and entails waiving your right to forfeiture.

Issue Court Proceedings

Issuing court proceedings are often the last resort as they can be time-consuming and also expensive.

If you’re a commercial property owner or landlord who wants to know more about the possible avenues for recovering debt or you currently have a tenant whose rent is in arrears, speak to one of our specialist commercial property solicitors first. We can provide bespoke guidance as to the best practices for your commercial property, as well as assisting you with deciding on the best course of action for recovering full payment without breaking the bank.

To get in touch simply fill out our Online Form or call your local Foys Solicitors office:

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This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.

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Hosting an Airbnb: Everything a landlord needs to know

Hosting an Airbnb: Everything a landlord needs to know

Airbnb is a global, online marketplace which matches homeowners with guests in regard to short-term homestays and/or tourism experiences in cities all over the world.

It has emerged as one of the most successful and most popular rental services and hospitality companies globally thanks to its distinct advantages:

  • It allows homeowners to make extra income by renting out a room temporarily (a relatively low-risk, high-return approach).
  • It empowers travellers to seek low-cost or non-traditional accommodations.

Like other disruptive innovations, Airbnb has its fair share of controversy. The shift from hotels to Airbnb lodgings has led to cities losing out on millions on tourism taxes and once quiet neighbourhoods are being swamped with short-term sublets who may be too rowdy for one’s liking. In addition, while the ‘risk’ is deemed particularly low for those letting out their premises, the laws governing the rights and responsibilities of landlords and their guests aren’t clearly defined, and as such, this can have serious ramifications in circumstances where something does go awry.

There have been a handful of highly publicised incidents involving Airbnb guests occupying premises under false pretences, and others involving the questionable health and safety conditions of premises being rented via the room-sharing platform.

In 2016 a home rented in Putney through Airbnb was severely damaged after the guest held a party, with the same year seeing a balcony in Brighton collapse with four Airbnb guests injured in the process. Despite lawsuits being settled, the regulation of these properties is still an ongoing process – mainly due to the company’s global presence and legislation differing in many countries when it comes to health and safety and rental licencing and permissions.

Potential consequences for landlords

Airbnb operates in a legal grey area when it comes to navigating the murky waters of homeowner insurance and business related activities. Typically, a homeowner insurance policy excludes business-related activities as the property is not structured as corporate premises. This makes claims against the landlord (where a guest suffers an injury) or claims of property damage by the landlord difficult to traverse when it comes to insurance – particularly where liability is concerned. While Airbnb does offer Host Protection Insurance and has a track record of covering damage costs in the event of lessee fraud and false pretence, this doesn’t take the place of a substantial home insurance policy and as such, coverage can be problematic if a problem does arise.

Moreover, depending on where your property is located, you may be subject to specific planning regulations that dictate whether your premises is subject to additional costs as a result of letting. For instance, under UK property regulations, if a premises is available to let for 140 days or more per year it is classified as a self-catering property and consequently subject to business rates. Rates will be based on the property type, size, location and how many guests are able to stay in your listing.

This should certainly be considered and properly researched prior to advertising on Airbnb as you may be required to apply to your local council for a “change of use” to classify your property as commercial rather than residential.

If you are a responsible for the mortgage on your property, you need to ensure that subletting is permitted as the bank or mortgage company are invested in your property and as such, have a legal interest in its maintenance and upkeep.

As a landlord, your responsibilities for maintaining the property and ensuring your guests’ safety are the same under Airbnb’s rental terms and conditions. The company isn’t liable for upkeep, so ensuring that the structural integrity of your building and any fire, gas and electrical safety regulations are up to standard is your duty to the guests.

Protecting your guests, your home and yourself

If you’re planning to become an Airbnb host by listing your property on the Airbnb site, here are a few things you need to consider:

  • Check with your local council on its short-term rental legislation. In London, the Deregulation Act of 2015 allows homeowners to rent out their premises for up to 90 nights per calendar year without being considered a ‘change of use’. This means, once your property in London has been rented out for 90 days in a year, Airbnb automatically limits your listing unless you have planning permission to host more frequently.
  • If you own a leasehold property, chances are you will find a clause restricting your rights to sublet without the freeholder’s consent.
  • Check any terms and conditions in both your mortgage and insurance which may include clauses prohibiting your leasing of the premises.

Once you have established that your premises are able to be leased for short-term with Airbnb, the next step is clearly and comprehensively outlining what is allowed for guests staying at your property. This may include:

  • If you allow parties, pets or smoking.
  • Outline the ramifications if the rules are broken.
  • Ensure your insurance coverage is substantial and up-to-date.

How to resolve a dispute

The potential for a nightmare Airbnb guest is well documented, with stories gaining widespread media attention following the company’s prolific rise to success. But often not mentioned are disputes among neighbours who resent short-term guests holding wild parties and exhibiting anti-social behaviours.

If your Airbnb guests have left you with a flood of complaints from your neighbours, it’s wise to talk to them and resolve the issue directly. However, if they have taken their case to the First-Tier Tribunal (Property Chamber) which handles disputes over property and land, then it is best that you seek help from an experienced property solicitor like Foys.

At Foys Solicitors, we have a proven track record of assisting landlords in the understanding of their rights and responsibilities as well as in best protecting themselves and their finances. To get in touch simply fill out our Online Form or call your local Foys Solicitors office:

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This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.

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