Extra Protection for Business Tenants who miss Rent Payments

As the coronavirus continues to tighten its grip around the global economy, the UK Government has announced an unprecedented series of measures to support businesses which have been affected by this international crisis.

It has now published the landlord and tenant law amendments to the emergency Coronavirus Bill 2019-21 (“the Bill”). These cover both residential and commercial lettings and apply to England and Wales.

In the current economic uncertainty, commercial landlords and tenants alike will have concerns as to the widespread effect the coronavirus is having.

Today is a quarter day, being the rent payment date for many business tenants. Hopefully, therefore, many landlords and tenants will already have had conversations about reaching voluntary arrangements for deferring the rent or payment by instalments. However, the Bill, if passed in its current form, will provide the following additional measures for commercial tenants:

• No right of re-entry or forfeiture for non-payment of rent under a commercial lease will be enforceable between the day after the day on which the Bill is enacted until 30^th June 2020 (“the relevant period”).
• The Secretary of State (or, in relation to Wales, the Welsh Ministers) will be able to extend the relevant period in regulations made by statutory instrument.
• For existing litigation based on forfeiture for rent arrears, the tenant cannot be evicted until the end of the relevant period.
• Failure to pay the rent during the relevant period is not to be treated as persistent delay in paying rent for the purposes of section 30(1)(b) of the Landlord and Tenant Act 1954.
• During the relevant period no conduct by or on behalf of a landlord, other than an express waiver in writing will be regarded as waiving a right of re-entry or forfeiture for non-payment of rent.

It should be noted that commercial tenants will still be liable for the rent after this period, so parties to commercial leases are still encouraged to enter into dialogue to agree how any missed rent payments are to be repaid.

It is hoped that the new measures will provide peace of mind to many small businesses that are struggling with their cash flow during these unprecedented times.

If you are a commercial landlord or tenant and would like to discuss how these new measures may affect you please contact Elizabeth Gibson on (01603) 675641 or eg@rogers-norton.co.uk.