Ban On Commercial Lease Forfeiture And Rent Arrears Recovery

Posted by Coles Miller on 29th June 2020 -

Commercial tenants struggling to pay the rent can breathe a sigh of relief ahead of the June Quarter Day (June 24). They will be spared eviction – for the moment at least.

Landlords will be prevented from using the following until September 30 2020:

• forfeiture
• Commercial Rent Arrears Recovery (unless they are owed 189 days of unpaid rent)
• statutory demands and winding-up petitions.

New Voluntary Code Of Practice For Commercial Property

The government’s new (and long-awaited) code of practice for commercial property encourages tenants and landlords to work together in these troubled times.

The code is designed to help landlords and tenants to map out a recovery plan during the Covid-19 coronavirus pandemic.

It is endorsed by leading organisations including British Chambers of Commerce, the British Property Federation, the British Retail Consortium, the Royal Institution for Chartered Surveyors and UKHospitality.

If You Owe (Or Are Owed) Rent

The legal position on rent arrears remains the same: tenants (and guarantors) are still liable to pay rent in full – unless this is renegotiated by agreement with their landlords.

Tenants who are unable to pay their rent in full should seek an agreement with their landlord to pay what they can (taking into account the principles of the new voluntary code).

But there is nothing stopping landlords from issuing County Court money claims against tenants now. These claims may include interest and costs.

Find out more here about commercial property litigation and other business disputes.

What Will Happen After September 30 2020?

In my opinion, there will be no further extension to the ban on forfeiture, Commercial Rent Arrears Recovery, statutory demands and winding-up petitions after September 30.

So tenants – if they haven’t already done so – should now actively seek agreements with landlords to avoid forfeiture and/or insolvency in October.

Get Expert Legal Advice On Litigation

Contact Coles Miller commercial litigation solicitor Dion McCarthy for expert legal advice on business property disputes, rent arrears and forfeiture.