24 Jun 2021
Measures first announced at the start of the initial lockdown in 2020 to protect tenants from enforcement action in relation to unpaid rent have once again been extended. Some measures will remain in place until 25 March 2022. The Government has also announced new legislation to help those businesses that have accrued rental arrears during period of enforced closure during lockdown. This briefing summarises the updated position in relation to landlord remedies.
Insolvency processes including the new moratorium procedure may restrict the use of the remedies below. The Government’s (temporary) code of practice for commercial leases remains a voluntary code, but one which the Government has emphasised it expects landlords and tenants to follow. The Government has made it clear that any businesses that can pay all or any of their rent should do so. The Government has reiterated its intention to launch a review of commercial landlord and tenant legislation (the Landlord and Tenant Act 1954), which will consider different models of rent payment and evaluate the impact of COVID-19 on the property market in general, later this year.
It remains the case that none of the measures removes or reduces the obligation to pay amounts due under a lease. Instead they defer the payment obligation or opportunity to enforce it. But it remains to be seen how the Government’s proposals for a system of binding arbitration may change that position in future.
Following the most recent extension, the Coronavirus Act 2020 prevents forfeiture for non-payment of rent until 25 March 2022 in both England and Wales. Action by a landlord in that period will not result in a waiver of a right to forfeit for non-payment of rent unless it is express and in writing. The right to forfeit will be available again if rent remains unpaid when this restriction is lifted.
This material is provided for general information only. It does not constitute legal or other professional advice.
Are you sure want to delete comment ?
Scan this QR Code to share this content