Coronavirus – Measures to Protect Commercial Tenants

29/04/2020

The Government has recently announced further emergency measures to protect Commercial Tenants from rent recovery action as a result of the coronavirus pandemic. The new measures are additional to the Coronavirus Act 2020 which imposed a Commercial Rent Moratorium (see our article here).

Existing Measures

On 27 March 2020, the Coronavirus Act 2020 (the ‘Act’) came into force. Section 82 of the Act suspended a landlord’s right to forfeit a commercial lease for non-payment of rent for a period of three months. However, commercial tenants remained exposed to other methods of rent recovery, including Commercial Rent Arrears Recovery (CRAR), statutory demands, winding up petitions and money claims.
In response to concerns that the moratorium did not go far enough to protect commercial tenants from recovery methods for unpaid rent during the coronavirus crisis, the Government has announced further measures to protect commercial tenants which will also be in force until 30 June 2020.

Additional Measures

The pending legislation, which will be included in the Corporate Insolvency and Governance Bill, will include the following:

  • A temporary ban on the issue of statutory demands, made between 1 March and 30 June 2020, and winding up petitions presented from 27 April, through to 30 June 2020, to commercial tenants where they cannot pay their bills due to the Coronavirus pandemic.
  • A prevention on the use of Commercial Rent Arrears Recovery (CRAR) unless a landlord is owed 90 days rent.

Summary

Commercial landlords will be prevented from taking rent recovery action against tenants who have failed to pay due to the coronavirus pandemic. The measures are temporary and will be in force until 30 June 2020; however, as with other temporary legalisation, it could be extended further if necessary. Therefore, landlords and investors are being urged to work collaboratively with tenants who are unable to pay their bills during the coronavirus pandemic.

For further information or advice on any of these issues, please contact us on 01732 770660 or email [email protected]

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

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