Protections for commercial tenants to be extended

June 22, 2020

The Government has announced that it will be extending the restrictions on the ability of landlords to recover rent arrears from tenants as follows:

– The Government will amend the Coronavirus Act 2020 to extend the moratorium on evictions from 30th June to 30th September, meaning no business will be forced out of their premises if they a miss a payment in the next three months.

– Further legislation will prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent

– The Corporate Insolvency and Governance Bill will be amended, extending the temporary ban on the use of statutory demands and winding-up petitions where a company cannot pay its bills due to coronavirus until 30th September

 – This is of particular significance to landlords as the next quarterly rent payment day is this week on 24th June.

The Government is still encouraging tenants to pay rent if they are able to, and to enter into discussions with landlords in order to reach compromise agreements on the rental payments due.  These conversations will become increasingly important over the coming weeks as more premises are allowed to open and businesses seek to get working again.

We are seeing that many of our landlord and tenant clients are agreeing rent payment compromises to support each other through this time and would simply  remind all parties of the importance of documenting any such agreement (please see https://www.herrington-carmichael.com/covid-19-commercial-lease/ for more information).

If you require further guidance regarding the effect of the Coronavirus on commercial lease terms or advice on commercial leases in general, please contact us to speak to a member of our Real Estate Team.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.

Liz Hailey
Partner, Head of Real Estate
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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