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Coronavirus Update for Commercial Landlords

Following on from the Government’s original measures at the end of March 2020 to help British businesses in response to the Coronavirus pandemic, further temporary measures in relation to commercial tenancies have landed.

At first under the Coronavirus Act 2020, legislation was brought in preventing landlords of business tenancies from forfeiting a lease for non-payment of rent until at least 30 June 2020. The further changes introduce a ban on statutory demands between March 2020 and June 2020, and also in relation to winding up petitions (between 27 April 2020 and 30 June 2020) to be temporarily voided and changes to be made to the use of Commercial Rent Arrears Recovery – building on measures already introduced in the Coronavirus Act to give support to those companies unable to pay their bills due to COVID-19.

The idea is probably to encourage better collaboration between landlords and tenants, in the hope they will navigate themselves through this period of economic uncertainty. In some cases this is having to work in practice, with parties reaching agreements on debt obligations in the absence of usual remedies.

However, there have been reports of more aggressive behaviour in terms of rent collection from high street stores. With this sector so severely affected by lockdown restrictions and where big high-street names are facing administration, the Government really has no option but to have stepped in specifically to provide some support to this sphere.

The changes will form part of the imminent Corporate Insolvency and Governance Bill, with secondary legislation proposed that prevents landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed at least 90 days rent.

Although the purpose is to support struggling commercial tenants, by not going further, the Government is inevitably balancing the fears of commercial landlords by demonstrating some appreciation of the strain many are under at this time. Tenants are called upon to continue to pay rent where businesses can afford to do so, and work constructively with landlords ‘in the spirit of fair commercial practice’.

If you and your business have any queries or require support regarding this new Coronavirus legislation, Fosters Solicitors team of Commercial Litigation Lawyers have a wealth of experience and knowledge to assist you. Please call us on 01603 620508.

This article was produced on the 1st May 2020 by our Litigation & Dispute Resolution team for information purposes only and should not be construed or relied upon as specific legal advice.