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Commercial Property Leases

New Rules On Commercial Lease Forfeiture23rd Jun 2020

by Dion McCarthy on 23rd Jun 2020

Contact Dion McCarthy

Updated: 21 June 2021 – Eviction Moratorium Extended Again 

Commercial tenants struggling to pay the rent can breathe another sigh of relief. They will be spared eviction – for the moment at least.

Landlords will be prevented from using the following until 25 March 2022:

  • forfeiture
  • Commercial Rent Arrears Recovery (unless they are owed 189 days of unpaid rent)
  • statutory demands and winding-up petitions.

New Voluntary Code Of Practice For Commercial Property

The government’s new (and long-awaited) code of practice for commercial property encourages tenants and landlords to work together in these troubled times.

The code is designed to help landlords and tenants to map out a recovery plan during the Covid-19 coronavirus pandemic.

It is endorsed by leading organisations including British Chambers of Commerce, the British Property Federation, the British Retail Consortium, the Royal Institution for Chartered Surveyors and UKHospitality.

If You Owe (Or Are Owed) Rent

The legal position on rent arrears remains the same: tenants (and guarantors) are still liable to pay rent in full – unless this is renegotiated by agreement with their landlords.

Tenants who are unable to pay their rent in full should seek an agreement with their landlord to pay what they can (taking into account the principles of the new voluntary code).

But there is nothing stopping landlords from issuing County Court money claims against tenants now. These claims may include interest and costs.

Find out more here about commercial property litigation and other business disputes.

What Will Happen After 25 March 2022?

There is no guarantee of further extensions to the ban on forfeiture, Commercial Rent Arrears Recovery, statutory demands and winding-up petitions after 25 March 2022.

So tenants – if they haven’t already done so – should now actively seek agreements with landlords to avoid forfeiture and/or insolvency after the moratorium ends.

Get Expert Legal Advice On Litigation

Contact Coles Miller commercial litigation solicitor Dion McCarthy for expert legal advice on business property disputes, rent arrears and forfeiture.

This document is not intended to constitute and should not be used as a substitute for legal advice on any specific matter. No liability for the accuracy of the content of this document, or the consequences of relying on it, is assumed by the author. If you seek further information, please contact Managing Partner Neil Andrews at Coles Miller Solicitors LLP.