What is the minimum period for Flexible Furlough?

The practicalities and processes regarding disrepair claims will undoubtedly be affected. Housing providers will have to adopt a risk-based approach and consider government guidance to handle claims going forward. Key points to consider are:

• Compliance with the Pre-Action Protocol for Housing Conditions Claims (particularly disclosure)
• The practicalities of inspection
• Non-urgent repairs

Most rent suspension clauses in commercial property leases are unlikely to come to the assistance of the tenant. These clauses normally apply only where the premises has suffered substantial physical damage and are, as a consequence, incapable of being occupied, used or accessed. The coronavirus pandemic does not involve any physical damage to a property, loss from the crisis will be purely financial. Such losses then will not be covered by the landlord’s buildings insurance policy in a way that will allow a tenant to claim rent suspension.

Some of these can be implemented by you, some need agreement or consultation and some depend on the wording of contracts. We’ll explain more in relation to each option.

The guidance is helpful and is likely to be useful to businesses as they seek to respond to the crisis and to restart their business activities as lockdown is eased. However, there remain outstanding questions. For example, can collaboration to prevent widespread insolvencies be viewed as in the interest of consumers? Businesses need to remain aware of the extremely high stakes involved in relation to competition law. Businesses contemplating collaboration with competitors should take legal advice before doing so.

Many policies will only provide business interruption cover if it arises from property damage. The FCA has acknowledged that insurers are entitled to reject claims in relation to such policies, notwithstanding the success of the FCA’s test case in the Supreme Court, and which was generally favourable to policyholders [Insert a link here to our update on the test case]. In other cases the policy wording will be less clear and businesses may legitimately feel that their insurer is wrongly withholding payment.

One route of challenge to an insurer’s decision is via one of the well-publicised class actions. Another route of challenge is by a complaint to the Financial Ombudsman Service (FOS). This service is open to consumers and small and medium-sized businesses, ‘micro-enterprises’, charities and trusts. The service will be an attractive option for many businesses, as it is free and relatively quick (although it remains to be seen how the service keeps up with an increase in demand as a result of the pandemic). You will need to have complained to your insurer before bringing a complaint with the FOS.

Further details can be found here.