Landlord Obtains Judgment For Payment of Rent Arrears

The High Court has granted a summary judgment in favour of a landlord against a retail tenant for the unpaid rents due under their lease irrespective of the COVID-19 pandemic and the Government’s restrictions on the remedies available to landlords.

In ordinary times this judgment would probably have not been particularly news worthy; but in light of the COVID-19 pandemic this could have caused serious concern for tenants (in particular in the retail and hospitality sectors) up and down the country.

Whilst the Government have introduced various restrictions since the start of the pandemic on what remedies are available to a landlord can take in relation to any unpaid rents, those rents remain due, unless the landlord and the tenant agree otherwise.

Here, the landlord of the Westfield Shopping Centre in Shepherd’s Bush issued a claim for summary judgment against The Fragrance Shop for unpaid rent. The Fragrance Shop had not paid rent and service charges since April 2020 and owes in excess of £166,000 (including VAT and interest). The Fragrance Shop, like many others in retail and hospitality, had been unable to trade for large periods of time since then as result of the Government restrictions. The retailer defended the claim by arguing that the claim had been issued prematurely contrary to the Code of Practice for Commercial Property Relationships During the COVID-19 Pandemic, the claim was a means of circumventing measures put in place by the Government to prevent forfeiture, winding up and recovery using CRAR and the extent of the landlord’s insurance policy and the rent suspension clause. These defences were dismissed by the Judge who stated that “the defendant has no real prospect of defending the claim to recover the outstanding rents”.

There will be many businesses (i.e. retailers, pubs and restaurants) who have been unable to trade during the pandemic who find themselves in the same situation as The Fragrance Shop facing rent arrears. Tenants will be left hoping that the Government, who has recently published a call for evidence on what to do when the current restrictions on landlords’ remedies expire at the end of June, will be able to find a way to help tenant’s businesses.

Like to talk about this Insight?

Get Insights in your inbox

To Top