Jurisdiction(s):
United Kingdom

Commerz Real v TFS Stores: summary judgment for rent arrears—no implied pandemic rent cesser, 'damage' means physical; insurance and Code no defence (England and Wales)

Published on: 21 April 2021

Published by a LexisNexis Property Disputes expert

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Commerz Real Investmentgesellschaft mbh v TFS Stores Ltd [2021] EWHC 863 (Ch) What are the practical implications of this case?

Advisers have long anticipated a defended claim for arrears of commercial rent predicated on the now routine coronavirus arguments that have echoed since the first lockdown in March 2020. Yet, despite the undeniable hardship endured by retail and other business occupiers during the pandemic, the court’s scope to recast the parties’ bargain is minimal. Put shortly, the court is tasked with enforcing, not reshaping, the bargain the parties struck. Sympathy cannot rewrite the parties’ contracts. Two aspects of the ruling stand out. First, implying a term into a meticulously negotiated commercial lease to suspend rent when government measures compel the premises to shut is exceptionally difficult. Those brokering pandemic provisions on renewals under the Landlord and Tenant Act 1954 will recognise the breadth and diversity of formulations currently in play. That market experience highlights numerous approaches, making any single rent cesser solution far from self-evident. With such variation in drafting, it is challenging to maintain that any specific rent cesser clause was ‘so obvious that it went without saying’. Second, the court concluded that the word ‘damage’ in the express...

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