Government extends Moratorium on Forfeiture of Commercial Tenants

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Following a number of announcements by the Government last week regarding measures to protect tenants’ businesses during the Covid-19 crisis, it has since announced that the moratorium on forfeiture of commercial leases for non-payment of rent has been extended until 30 September 2020.

The moratorium was introduced by section 82 of the Coronavirus Act 2020, which provides that ‘a right of re-entry or forfeiture, under a relevant business tenancy, for non-payment of rent may not be enforced, by action or otherwise, during the relevant period’. The ‘relevant period’ initially expired on 30 June 2020, but following calls from tenants for this to be extended, the Government has introduced the Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) Regulations 2020 and the Business Tenancies (Extension of Protection from Forfeiture etc) (Wales) (Coronavirus) Regulations 2020 (“the Regulations”) which apply to England and Wales respectively.

The Regulations have the effect of extending the moratorium until 30 September 2020. Commercial landlords were practically barred from starting or enforcing possession proceedings until 23 August 2020 pursuant to the recent amendments to Practice Direction 55, which you can read about HERE.

The extension of the moratorium pushes back landlords’ ability to recover rent or recover possession due to non-payment of rent further. Rental payments and any arrears will remain payable by the tenant, unless the parties to a lease have reached an agreement to the contrary, but the Regulations mean that landlords may have to wait longer to receive monies owed to them.

Despite this, the Government has reiterated that tenants should continue to pay rent wherever possible, and announced a Code of Practice to assist landlords’ and tenants’ conversations in this respect. Liz Ganderton discusses the Code of Practice HERE.

RELATED:   PROPERTY DISPUTE RESOLUTIONREAL ESTATE


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