26 March 2021 by Artan Llabjani

Are commercial tenants taking unfair advantage of Covid-19 protections?

A little over 12 months ago, the Government announced that commercial landlords would be prevented from forfeiting their tenants’ leases. This moratorium on forfeiture has been extended several times and, earlier this month, the Government granted a so called “final” extension until 30 June 2021. Whilst many landlords will be disappointed, this news was hardly surprising.

There will also be further restrictions effectively preventing landlords from exercising Commercial Rent Arrears Recovery until 1 July 2021.  The temporary ban on commercial landlords using statutory demands and winding up petitions against their tenants remains set to end on 31 March 2021 but this deadline may well also be extended.

The Government and many commercial real estate professionals are encouraging landlords and tenants to reach settlement on arrears with reference to the Code of Practice published by the Ministry of Housing, Communities and Local Government.

In fact, the Government is “prepared to take further steps” if the parties fail to have these discussions.  It has called for evidence and, if it is not satisfied that tenants are adhering to the Code and paying rent when they can afford to do so, the Government will consider potential alternatives.  These may range from a phased withdrawal of current protections to the introduction of new legislative options to protect those most impacted by Covid-19.

The British Property Federation’s take on the Government’s latest u-turn is available here.

For further information, please contact Artan Llabjani

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