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Government extends restrictions on commercial leases until the end of 2020

The Government has extended the temporary ban (known as moratorium) on commercial property evictions until the end of 2020.

Introduced on the 16th September 2020, The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 2) Regulations 2020  means that landlords are now prevented from forfeiting commercial leases for non-payment of rent until 31 December 2020.  Landlords are therefore still prevented from taking any forfeiture action for non-payment of rents or other sums (including service charges and insurance rent) during the period between 26 March 2020 to 31 December 2020.

Changes have also been made in relation to the amount of unpaid rent that must be in arrears before the Commercial Rent Arrears Recovery (‘CRAR’) can be used.

Currently a landlord cannot seize goods for non-payment of rent until at least 189 days’ worth of rent arrears has accumulated. The new regulations, The Taking Control of Goods (Amendment) (Coronavirus) Regulations 2020 which come into force on 29 September 2020, set out that 276 days rent must be in arrears to use CRAR before 24 December 2020 and that goes up to 366 days rent on 25 December 2020.  These changes will further protect tenants who do not pay the upcoming September and December quarter rents.

The Government’s recent announcements are in an effort to protect jobs and businesses over the next few months and those commercial tenants who have suffered greatly due to the pandemic restrictions.  Many landlords however, are left in a vulnerable position and we would advise that channels of communication are kept open and landlords and their tenants  work together to reach practical and commercial solutions that suit both parties if at all possible to help navigate the coming months.

The Government’s Code of Practice is a useful guide for landlords and tenants at this time.

Get the right advice… 

We are seeing an increase in calls surrounding these new changes.  Our team has a wealth of experience in commercial property matters and can provide tailored support and advice on leases, contractual obligations, agreements as well as commercially minded advice which is right for you and your business.

Whether you are a landlord or a tenant, it is important to understand your legal obligations and commitments under a lease even during the current challenging circumstances.

For more information or advice on these issues, please call our team on 01926 491181

To read our previous article on commercial landlords and tenants – what you should know – click here

Christopher Houghton                        Sat Bhandal                                 James Williams                             Navreet Dhesi

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