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Welcome to clarity
Welcome to clarity

Corporate, Commercial and Real Estate

Whilst there has been an increase in the last few years in businesses which operate remotely or virtually, most people still go somewhere to work and supply their services or sell their goods from premises. Some businesses own their premises; others rent those premises from landlords. In these challenging times when we are battling against the Coronavirus pandemic it is important that businesses continue to operate to the best of their ability and, to the extent that home working is not feasible, that they are able to do so from their premises.

The Government has played its part by way of a package of economic measures allowing businesses to delay some costs and be exempt from others.  Public intervention alone will not, however, be sufficient, and private property owners will also need to play their part - with a view on the medium to long term as well as short term interests - if businesses are to survive this crisis and come out the other side still trading. Discretionary spend, for example on some service charge items, should be regularly kept under review and trimmed where practical, although owners of multi-let buildings will still need to incur some expenditure to continue to responsibly manage their properties.  

Specific issues may arise:

  • If a multi-let building is closed down
  • If there is a specific case of Coronavirus detected with an on-site worker
  • If government orders are made requiring (or practically resulting in no option other than) shut down

Particular challenges exist in respect of construction sites, where social distancing can be problematic.  Nevertheless some construction work is of vital importance to the economy and a balance must be struck to ensure that financial resilience is restored as soon as possible once the pandemic passes.  Other issues arise from the self-employed status of many construction workers.

Many commercial contracts form the bedrock of business operations.  Circumstances arise from time to time, such as Coronavirus, which undermine the efficacy of those contracts.  These can lead to suspension, amendment of key terms, inability to perform, and - in extreme cases - rights to terminate can arise.  Terms such as "force majeure" and "frustration of purpose" are used liberally - in many cases out of context and with a degree of carelessness.  A pragmatic approach between the parties to key contracts can result in a better outcome for both parties.  Talking is usually better than litigating, especially after the event.

Some disruption may be covered by insurance, but insurers will be seeking to mitigate their liabilities under policies as well.  Because of the overriding obligation of good faith in insurance contracts you must be certain to make full disclosure and be in full compliance with your own obligations.

Whilst these circumstances continue to be relevant it is important that you have access to clear and informed legal advice.  We at Morton Fraser have well-regarded and experienced teams who stand ready to assist you with your challenges in these trying times.  We look forward to being able to give you our support.