Can't Pay Commercial Lease
With so many financial demands on businesses these days - rising business tax and ever-increasing energy bills −paying a commercial lease can be difficult even though it’s a priority payment.
The problem if you don’t pay is that your landlord can take enforcement measures quickly in order to collect their debt. In some cases they don’t even have to go to court to take the legal action that severely damages your business.
Following the onset of the Covid-19 crisis, the government introduced the Coronavirus Act, a piece of emergency legislation to help companies during these extremely challenging times. As part of this legislation, landlords are unable to forfeit the leases of tenants who fall behind on their rent during this time. Following a three month extension, this ruling is now in place until the end of September 2020. While this provides companies with breathing space for the short-term, it is important to remember that this is a temporary measure which will come to an end . Once this happens, you will need to make arrangements with your landlord to clear the arrears which have accrued during this time. Taking advice now will put you in the best position possible when you are faced with resuming your rent payments.
So let’s look at what a commercial lease is, and how you should proceed if you can’t pay.
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The problem if you don’t pay is that your landlord can take enforcement measures quickly in order to collect their debt. In some cases they don’t even have to go to court to take the legal action that severely damages your business.
Following the onset of the Covid-19 crisis, the government introduced the Coronavirus Act, a piece of emergency legislation to help companies during these extremely challenging times. As part of this legislation, landlords are unable to forfeit the leases of tenants who fall behind on their rent during this time. Following a three month extension, this ruling is now in place until the end of September 2020. While this provides companies with breathing space for the short-term, it is important to remember that this is a temporary measure which will come to an end . Once this happens, you will need to make arrangements with your landlord to clear the arrears which have accrued during this time. Taking advice now will put you in the best position possible when you are faced with resuming your rent payments.
So let’s look at what a commercial lease is, and how you should proceed if you can’t pay.
Other Products and Services from Real Business Rescue
Creditors' Voluntary Liquidation
A Creditors’ Voluntary Liquidation (CVL) is a formal insolvency procedure which involves the directors of an insolvent company voluntarily choosing to bring their business to an end, and wind the company up. Although the process is entered into on a voluntary basis, it often follows the cumulation of many months of financial distress when the possibility of a successful turnaround has been extinguished. Even though this is far from an ideal situation, for an insolvent company which has no viable future as a profitable entity going forwards, voluntary liquidation by way of a CVL may be the best solution for all concerned.
Winding Up Petitions
If your company is served with a winding up petition, it represents the most serious legal action a creditor can take. If nothing is done about it, the petition starts a series of events that disables your ability to trade, and ultimately means the end for your business.
Can My Company be Rescued?
When you seek assistance from a licensed insolvency practitioner, their first objective will be to rescue your business and return it to profitability. This can be effected in a number of ways, depending on your company’s individual circumstances and the level of debt owed.
You may have heard the terms ‘business rescue’ and ‘business recovery’ - the processes associated with these terms include sourcing new funding, restructuring a company’s affairs including assets and debts, and entering formal insolvency solutions such as a Company Voluntary Arrangement or company administration.
Once you have recognised that a problem exists and that the company is in danger of entering insolvency, you should seek assistance from a licensed insolvency practitioner (IP). They will be able to assess your situation, and guide you towards the best options.
You may have heard the terms ‘business rescue’ and ‘business recovery’ - the processes associated with these terms include sourcing new funding, restructuring a company’s affairs including assets and debts, and entering formal insolvency solutions such as a Company Voluntary Arrangement or company administration.
Once you have recognised that a problem exists and that the company is in danger of entering insolvency, you should seek assistance from a licensed insolvency practitioner (IP). They will be able to assess your situation, and guide you towards the best options.
Real Business Rescue
Head Office 340, Deansgate, Manchester, M3 4LY, United Kingdom
Real Business Rescue specialise in a wide variety of services including company debts, liquidation and closure, restructuring and rescue and specialist business advisory for a wide variety of industries and sectors throughout the UK. We cater for businesses and organisations that require assistance with their insolvency issues during COVID-19 and can offer expert advice across a broad range of professional services.