Case Study

Question 1

What is the covid 19 Code of Practice?

Answer 1

• A code of practice for commercial professional relationships during the Global Pandemic
• Currently planned to remain in force until 24th June 2021
• sets out best practice guidelines for Landlords and Tenants in relation to rent and service charge arrears during the pandemic.
• The code encourages parties to work collaboratively
• it is a voluntary standard but has been endorsed by RICS

Question 2

What Is the RICS Covid-19 Commercial Rental Independent Evaluation Service?

Answer 2

• a method of alternative dispute resolution service that seeks to resolve disputes between the parties amicably.

Question 3

What are some of the pitfalls to using CRAR?

Answer 3

• if you use it, you waiver the right to immediate Forfeiture of the Lease as an Enforcement Agent cannot use CRAR and Forfeiture for the same debt at the same time
• the money collected may not cover the cost of the debt once the auction and compliance fees have been deducted.

Question 4

What are some of the advantages of using CRAR?

Answer 4

• All fees are payable by the Debtor
• Your current tenant would stay in the premises, saving you the problem of having an empty shop temporarily, and having to find a new tenant.
• If the Debtor pays in full at the time of the call, or adheres to the Controlled Goods Agreement agreed, you will receive the monies owed to you.
• With the Enforcement Agent legally obliged to send out a Notice of Enforcement (Compliance Letter) this could “tip off” the tenant before the Enforcement Agent calls, which could give him time to remove or secrete assets, or to abscond from the property overnight.

Question 5

What is a section 17 notice?

Answer 5

A notice that specifies the amounts due within 6 months beginning on the date the charge becomes due.

It is prescribed form of notice informing a former tenant or guarantor of their liability and protects the Landlords’ right to seek payment.

Question 6

In your tenancy schedule why do the s/c floor areas differ from the total floor areas

Answer 6

The Service charge is based on the ground floor footprint in accordance with the s/c code, as we do not know what the Mezz area is used for.