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Government Extends Protection for Commercial Tenants Until March 2021

on Wednesday, 16 December 2020.

On 9 December 2020, the Government announced a further extension to protect commercial property tenants until 31 March 2021.

The protection is for businesses who are struggling to cope with the effects of the coronavirus (COVID-19), particularly those in the hospitality and retail industries. The Government is clear that businesses that can pay any or all of their rent, should do so.

Scope of the Ban on Evictions           

Housing Secretary, Robert Jenrick said that this will be the 'final' extension of the ban on evictions, after it was originally expected to end in September 2020. The extension is intended to give landlords and tenants three months to come to an agreement on unpaid rent. 

The position for landlords and tenants under section 82 of the Coronavirus Act 2020 is as follows:

  • Landlords cannot exercise their rights to re-enter premises or forfeit a commercial lease as a result of a tenant's failure to pay rent.
  • Tenants will still be required to pay rent (and other payments) after 31 March 2021.
  • Landlords can sue for rent arrears at their discretion, unless they are able to reach an agreement with the tenant to waive or defer some of the payments.

The following restrictions will also be extended until 31 March 2021:

  • Landlords will only be able to exercise Commercial Rent Arrears Recovery (CRAR), if there are 366 days of outstanding rent after the December 2020 quarter's rent is due. 
  • The use of statutory demands and winding-up petitions being enforced by creditors on companies who are facing debts because of COVID-19.

Coronavirus real estate 2

Further Updates

Further guidance to support the negotiations between landlords and tenants will be published and will sit alongside the voluntary Code of Practice for commercial property relationships during the COVID-19 pandemic. 

The Government also unveiled plans to carry out a review of the commercial landlord and tenant legislation to reflect the current economic conditions. The review, due to be launched early in 2021, will consider a range of issues including ways to improve collaboration between commercial landlords and tenants and changes to the leasing process. 

If you are a landlord or a tenant and would like to discuss your options regarding your lease, please contact Katie Hickman in our Real Estate team on 07557 528 936, or complete the form below.

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