Cayman: Ogier urges tenants and landlords to look at leases ‘sooner rather than later’ to determine Covid-19 impact

William
Jones, a partner in Ogier's Cayman Islands dispute resolution team,
and Nat Duckworth, a barrister specialising in landlord and tenant
law in London, have joined together to consider whether, in light of
Covid-19, tenants who cannot use the property they are renting must
they pay rent, in full, to their landlord.

With
stores, bars, offices, gyms, industrial premises and most other
places of business closed across the Cayman Islands, and many
properties used as second homes or rentals also lying empty, the
question has become increasingly important.

William
said: "Covid-19 is an unprecedented event. Lockdown measures
implemented in response to it give rise to all sorts of questions
that property owners and businesses simply have not had to think
about before. The best advice, for both landlords and tenants, is to
get ahead of this: look at your lease, take advice about its contents
and put a clear strategy in place, sooner rather than later."

William
and Nat explain that each case, and in particular each lease, is
different, so landlords and tenants should always take their own
legal advice. But, in summary, landlords and tenants should consider:

• Rent
  suspension or rent abatement clauses in a lease
  
• An
  implied term of the lease that the rent should be suspended or
  reduced
  
• “Frustration”
  of a lease due to legislation requiring businesses to close
  
• Whether
  the legislation is a “supervening illegality” that means the
  tenant’s rent is suspended
  
• Whether
  the landlord is in breach of the “covenant for quiet enjoyment"
  if the tenant cannot use the property and therefore liable to pay
  damages
  
  
• Is
  the landlord obliged to pursue an insurance claim and to credit the
  tenant with the proceeds
  
  
• If
  the landlord “forfeits” the lease for non-payment of rent, would
  the court make the tenant pay all or just part of the arrears as the
  price of getting his lease back?
  

William
added:

"Nat
and I realised that questions like these are absolutely vital to
answer while both tenants and landlords struggle with the current
situation. To look at individual cases it is obviously necessary to
delve into a few legal questions.”

ENDS

About
Ogier

Ogier provides advice on the
British Virgin Islands, the Cayman Islands, Guernsey, Jersey and
Luxembourg law through our network of offices that also includes Hong
Kong, Shanghai and Tokyo. We are the only law firm to advise on these
five laws.

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