How Covid-19 Regulations Are Changing Landlord-Tenant Dynamics

Hastily enacted regulations addressing a fast-unfolding pandemic have introduced a layer of complexity around leases between tenants and landlords.

Governments worldwide have implemented a range of emergency legal and fiscal policies to help cushion the economic damage caused by COVID-19 travel restrictions and stay-home measures. Each jurisdiction has established their own rules, resulting in myriad policies around returning to work, rent relief and codes of conduct for payment forbearance, and for helping tenants or property owners get access to government grants and loans.

“Many of these relate in some way to either direct fiscal support or regulatory suspension of the standard legal requirements around the tenant-landlord relationship,” says Jeremy Kelly, a director in JLL Global Research.

Many of these measures are tenant-friendly. Given the current soft market conditions, tenants are arguably in a stronger negotiating position in many markets, says Kelly.

This had led to some concerns about the position of landlords. One of the issues raised by the various measures introduced to support companies through the crisis is that they have frequently involved direct financial support to tenants, or a prohibition on landlord enforcement mechanisms for collecting rent.

Risk of unintended impacts