27/03/20

Extra Protection for Businesses with Ban on Evictions for Commercial Tenants who miss Rent Payments

The UK Government announced that the moratorium on forfeiture on commercial leases for non payment of rent will be extended to 30th June 2021. This means that there is a ban on evictions for commercial tenants before this date’

Prohibition on Forfeiture

Under section 82 of the Coronavirus Act 2020 the Government introduced a temporary suspension of the landlord’s rights to forfeit business leases for non payment of rent until 30th June 2020.  This was subsequently extended three times and is now extended for a fourth time until 30th June 2021.

The landlord’s right to forfeit is effectively suspended.

Renewal of Business Tenancies

A landlord should not be entitled to rely on a tenant’s non payment of rent during the relevant period, to oppose renewal of a business tenancy under the Landlord and Tenant Act 1954.

Other remedies

The Act does not appear to prevent Landlords taking other action against a tenant for non payment of rent, as the legislation only applies to a landlord’s right to forfeit. They do not suspend a tenant’s obligation to pay rent.

A landlord could seek judgment through the courts for unpaid rent, however, it may be difficult to practically take any steps given the current lock down.

Keep Talking

The advice would be for landlords and tenants to talk to each other about their respective predicaments.

Tenants will have effectively obtained a rent moratorium but rent will have to be paid ultimately.  Overall, it would seem sensible in the present circumstances if both landlord and tenant were to find solutions to balance their interest to enable both to survive in the present unprecedented circumstances.

Kitsons Solicitors - James Cross

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    27/03/20

    About the author

    Kitsons Solicitors - James Cross

    James CrossPartner and Head of Litigation

    James is a Partner and Head of our Litigation team

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