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Article
15 May 2020

If you have a leasehold interest in your hotel (rather than a freehold interest), are you complying with the terms of your lease?

Perhaps your biggest concern is whether you can continue to pay your rent.

In recent weeks, we have seen landlords giving rent free periods; giving rental discounts; agreeing to rent being paid monthly; and deferring rent payments for a set period of time. If you have not yet approached your landlord for the same, it may be worth doing so now.

If you are unable to pay your rent, it is helpful to note that there is a temporary ban in place preventing the landlord from forfeiting your lease and to restrict the use of the Commercial Rent Arrears Recovery process. If you would like further information about these protection and their limitations, please refer to the following articles: Suspending commercial property evictions welcomed but agreement needed on interest rate levied on late rent payments and Further temporary legislation in force in relation to CRAR.

You might also be in breach of other provisions in your lease, for example, any obligation in the lease to keep the hotel open. In these circumstances, we suggest you discuss this with your landlord and ask for confirmation in writing that this breach is waived, at least during the period of forced closure.

To read more tips for hotel owners and managers click here.