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Joanna Bryan

Chartered Legal Executive - Uckfield

Government extends period of protection for commercial tenants until the end of September

On Friday 19 June, the Government extended the moratorium on the remedies available to landlords when tenants are in default of their commercial lease covenants. The new time limits under the Coronavirus Act 2020 are as follows:

  1. The protection against forfeiture of commercial leases for non-payment of rent was extended from 30 June to 30 September 2020. This protection is likely to come as a big relief in particular to pubs, cafes and restaurants, after the hospitality sector called upon the government for action in this area;
  2. A new Code of Practice for commercial property relationships during the COVID-19 pandemic has been developed with leaders from the retail, hospitality and property sectors to provide clarity for businesses when discussing rental payments and to encourage best practice so that all parties are supported. It is a code applicable to all sectors but is voluntary rather than mandatory. It encourages tenants to continue to pay their rent in full if they are in a position to do so and advises that others should pay what they can, whilst acknowledging that landlords should provide support to businesses if they too are able to do so;
  3. Secondary legislation to prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent (up from the current 90 days). The time period for which this measure is in force will be extended from June 30 to September 30.
  4. An amendment to the Corporate Insolvency and Governance Bill has been tabled which will extend the temporary ban on the use of statutory demands and winding-up petitions where a company cannot pay its bills due to coronavirus until 30 September.

No doubt landlords and tenants will factor the above changes into any rent concession negotiations they may currently be undertaking.

Contact us

If you need advice on how to legally document a rent concession or what remedies are still available to you as a landlord contact Jo Bryan or Stewart Gregory in Rix & Kay’s dedicated Commercial Property Team based in Brighton & Hove, Uckfield, Sevenoaks and Ashford

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