My business involves providing services to consumers. What are my legal obligations in relation to deposits paid by consumers for services that I have been unable to perform due to government restrictions?

With another lock-down in force in England, it has been confirmed that the courts will remain open. This is different to the first lockdown in March 2020, in which the majority of courts were closed and most face to face hearings did not take place. Hopefully, this new lock-down measure will ensure that cases are still being heard at a steady rate, and there should not be a backlog for your case to be dealt with.

Lord Chancellor Robert Buckland QC MP emphasised the importance of maintaining safety during the new measures: “Our courts & tribunals continue to be an essential public service, served by essential workers and meeting Covid-secure standards endorsed by public health officials. With the use of remote hearings wherever appropriate, this vital work can and should continue.”

A large sum of £110m has been spent in recent months to make courts safe and to ensure that trials should go ahead where necessary. As a result of the expenditure, hearings can now still take place both in person, whilst adhering to the rules, as well as remotely. Your case may be heard in court if it is deemed as being “necessary in the interest of justice”.

Precautionary measures, such as social distancing, will still be in place, with Judges and magistrates ensuring that this happens.

Lord Chief Justice, Lord Burnett of Maldon commented: “The next few weeks will present difficulties in all jurisdictions. But as before judges, magistrates, staff, the legal profession and others involved in the system will meet them and ensure that the administration of justice continues to function in the public interest.”

A new Permitted Development Right has been introduced by The Town and Country Planning (Permitted Development and Miscellaneous Amendments) (England) (Coronovirus) Regulations 2020 providing for the construction of new dwellinghouses on detached blocks of flats.

The new Right comes into force on 1 August 2020 and from this date development consisting of works for the construction of up to two additional storeys of new dwellinghouses immediately above the existing topmost residential storey which is a purpose-built, detached block of flats is permitted development.  The Right additionally covers specified associated works, the construction of fire escapes and ancillary structures, bin stores for example.

The Right is subject to detailed criteria being met and to a prior approval process to the Local Planning Authority who can consider the acceptability of the proposed development in a range of respects.  A link to the Regulations is here.

The Regulations additionally include a number of further amendments including additional rights for the holding of markets and for additional temporary uses of land for a time limited period.  They additionally include amendments to existing permitted development rights for the change of use of buildings to dwellinghouses through a requirement that there be adequate natural light in all habitable rooms.

The Government published guidelines on 23 March 2020 concerning house sales.

Estate Agents have been required to close their offices and although staff are allowed to work from home they must not attend properties for any reason.

Therefore, if the property has not yet been put onto the market you will be unable to obtain a proper valuation at present. Also, restrictions on movement means that people must not view properties in person. Therefore you ought to delay marketing.

If you have found a buyer and the property is empty then the transaction can go ahead but you may experience delays in the transaction. For example, if your buyer needs a mortgage there will be a delay in getting a mortgage offer and even if it’s a cash purchase there are likely to be delays with Local Authority Searches.

You should discuss with your conveyancer whether to include special contract conditions. These could take into account what happens if the buyer or someone in the chain falls ill between exchange and completion and cannot move on the anticipated completion date.

If you have exchanged contracts the Government guidelines indicate that the sale of an empty property can go ahead to completion. However, if the contents of the property have not been removed you may have difficulty getting it cleared. Similarly, your buyer or someone else in the conveyancing chain may find that their removers are unable to move them. If this happens, you ought to discuss this with your conveyancer and your buyer as soon as possible to see if completion can be delayed to a later date.

The change in the law has the potential to place much greater financial risks on suppliers, making it more difficult to exit a contract with a customer of doubtful solvency.  This will place increased emphasis on appropriate financial due diligence and credit checking before entering into supply contracts.

In addition to the obvious issues around financial risk, suppliers will also need to think carefully about how their contracts are drafted.  For example, any form of right that is drafted so as to be triggered on customer insolvency will clearly be problematic.  These could include:

• Retention of Title provisions, which are commonly drafted so that the right to enter premises and retake possession of the goods is triggered on insolvency;
• Provisions for brand protection, which seek to control how goods are dealt with on termination of the contract.

This is potentially a very significant development for many businesses.  We would strongly recommend specialist advice be obtained so that:

• businesses understand the potential increased risks faced; and
• where possible, contracts are updated so that appropriate protections are maintained.

Given the impact the Coronavirus is going to have upon the commercial property market, landlords will undoubtedly, as a matter of good commercial sense, will have to seriously entertain approaches from tenants seeking a rent suspension – notwithstanding there is no entitlement to the same under their lease.

Some landlords may decide it is better to waive or suspend rental payments over the short term rather than face their tenants going out of business and leaving them with an empty building in a flat or dead market.

A measure falling short of a rent suspension would be for the tenants to negotiate with their landlord’s monthly payments of rent rather than quarterly and for those monthly payments to be in payments arrears, rather than in advance.