The Government have given Commercial Tenants a Lifeline
The Government has announced that it will be extending the restrictions on the ability of landlords to recover rent arrears from tenants as follows:
- The Government will amend the Coronavirus Act 2020 to extend the moratorium on evictions from 30th June to 30th September, meaning no business will be forced out of their premises if they a miss a payment in the next three months. This does not mean that a Landlord cannot obtain possession for other breaches.
- Further legislation will prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent. It must be clarified, that rent is still due by the Tenants to their Landlords.
- The Corporate Insolvency and Governance Bill will be amended, extending the temporary ban on the use of statutory demands and winding-up petitions where a company cannot pay its bills due to coronavirus until 30th September
- This is of particular significance to landlords as we have just passed the quarterly rent payment day last week on 24th June.
The Government is still encouraging tenants to pay rent if they are able to, and to enter into discussions with landlords in order to reach compromise agreements on the rental payments due. These conversations will become increasingly important over the coming weeks as more premises are allowed to open and businesses seek to get working again.
We are seeing that many of our landlord and tenant clients are agreeing rent payment compromises to support each other through this time and would simply remind all parties of the importance of documenting any such agreement.