Rent Holidays

A rent holiday is an illusion. Its purpose is exactly the same as when a shop offer "no repayments for 12 months". All it does is postpone the date when you start paying for the occupation you have already enjoyed. It is not the holiday. It does not reduce the amount you are going to pay.

If a landlord offers his tenant a ‘rent holiday’ of 3 months it is one of two things: either it is a Postponement – a postponement of the date when rent will be collected for 3 months, or it is a Waiver – a giving up by the landlord of any right at all to rent for a period of 3 months.

The first thing to do is clarify the position. 

With Postponement the tenant gets nothing. He may believe he is on holiday, he may believe he is on the moon, but his state of mind cannot affect external facts: his liability to pay rent continues. It has just been postponed. 

With Waiver, the tenant has got a rent-free period. But he needs to clarify with his landlord that he has got a waiver and not simply a postponement, and then he needs to convert the waiver (if that is what it is) into a contractual term. Why? 

Turning the waiver into a contractual clause

Assume the tenant has received a waiver and not a postponement. Because the waiver is unilateral – in other words the landlord has done it for nothing in return – it does not have contractual force. That means that the waiver can be withdrawn at any time and there is little the tenant can do. 

To convert the waiver into a contractual term something clear is required, and something moving from tenant to landlord is also required. The following is suggested:

“Dear Landlord,

We write in response to your offer yesterday of a rent holiday. We are pleased to hear that you will waive your right to rent for the period from 1st March 2021 to 30 June 2021 and in return, and in reliance upon your offer, we confirm that we will remain as tenants and will not leave/serve notice under the break clause/ or surrender the lease [delete as applicable].”

Rent holidays not reduced into writing, which remain unrecorded, and which have no consideration (i.e. nothing moving from tenant to landlord in return) are not uncommon and can cause tenants serious problems when their true nature is revealed.

If you are in this situation, take legal advice.