Restrictions on the use of statutory demand and winding up petitions

Government announces restrictions on the use of statutory demand and winding up petitions extended

On the 16 June 2021 the Government announced that it intends to extend the restrictions on the use of statutory demand and winding up petitions (to 30 September 2021) which applies to creditor situations protecting debtor companies, there is an exception of individual debtors but the restriction does include landlord and tenant matters.

The extension will also affect commercial rent arrears recovery action/CRAR and rent related forfeiture of business tenancies which are proposed to be extended to 25 March 2022.  When the restrictions on CRAR were introduced (in April 2020) a certain level of arrears was required (90 days) this threshold was subsequently increased 3 times thus requiring 6 quarters of rent to be overdue.  Although this further restriction is due to continue for a further 9 months, the minimum threshold is currently not set to be increased.  If a tenant has failed to pay rent from the March 2020 to the June 2021 quarter they may be protected from CRAR but will need to ensure payment of the upcoming September quarter rent.

There are proposals afoot by the Government to introduce ringfencing of arrears for businesses which have been forced to shut during the pandemic.  A draft Bill is awaited to see how this comes into being.

You can find out more regarding updates to these restrictions and the Government’s business support measures here: Gov.uk

Contact us

If you need support when resolving a dispute, contact Katie McClean with our Dispute Resolution team, via e. KatieMcClean@rixandkay.co.uk or t. 01273 766 929