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The High Court in England recently gave summary judgement to the landlord in Commerz Real Investmentgesellschaft mbh v TFS Stores Ltd, where the tenant attempted to defend debt claims brought by the landlord in respect of rents and service charges left unpaid during the COVID-19 lockdowns in the UK.
The tenant had a five-year lease of a unit in the Westfield Shopping Centre London which closed, like many other businesses, due to the COVID-19 lockdown in March 2020 and then during the subsequent lockdowns.
The landlord successfully brought a claim for unpaid rent and service charge in the sum of £166,884.82 plus interest. The tenant tried to defend on numerous grounds, all of which failed, some of which are as follows:
The key point for landlords and tenants from this judgment, is that not paying rent during the COVID-19 lockdowns will not always be protected by the regulations published by the Government designed to help businesses during these extraordinary times. The judgment reinforces the importance of lease drafting and highlights how the need to monitor the impact legislation has on those who it is designed to protect.
This article has been produced for general information purposes and further advice should be sought from a professional adviser. For advice or information, please contact our Commercial Real Estate team at Cleaver Fulton Rankin.