It has been the way of commercial lawyers and landlords to recover rent arrears through forfeiture proceedings in the County Court for many years. It is a relatively straightforward procedure, occasionally resulting in a relief from forfeiture application, but largely resulting in the required order to take back possession and to re-let the property.
Like so many things in our lives, Coronavirus has changed this: as tier 4 emerges and restrictions continue to increase, the positions of Landlords and Tenants of commercial premises only become more difficult.
On 26 March 2020 the Coronavirus Act 2020 (“the Act”) came into force as an emergency measure and changed dramatically the steps available to landlords in a situation where the tenant has incurred rent arrears, even if those rent arrears are continuing to increase.
Section 82 of the Act protects business tenancies for forfeit proceedings for the relevant period. This was initially 26 March 2020 until 30 June 2020 but has now been extended to 31 March 2021 by the Business Tenancies (Protection from Forfeiture: Relevant Period)(Coronavirus)(England)(No 3) Regulations 2020 (SI 2020/1472) (and equivalent provisions for Wales), which were published on 09 December 2020.
In addition to restrictions on forfeiture overall, proceedings must be considered in light of the amendments to Part 55 and new practice directions, and regulations have also increased the minimum net unpaid rent that must be outstanding before commercial rent arrears recovery (CRAR) may take place during the relevant period.
The Government has also published guidance and a voluntary code of practice in an attempt to aid negotiations and settlements.
Although at the moment these restrictions are set to be lifted in March 2021, the Government has the power to extend them and in any event has already announced that there will be a review of the commercial landlord and tenant legislation in 2021.
Rebecca is happy to accept instructions on commercial property matters, both from solicitors and on a direct access basis. If you would like further advice on the implication of coronavirus on commercial leases, and alterative methods of rent recovery, please contact email@example.com.