Struggling to pay your rent for your business premises? You are not alone. With data analysts reporting of Landlords being down £5.3bn on rents last year, there was a mixed reaction to the government announcement earlier this year to extend the moratorium on the forfeiture of commercial leases, effectively restricting landlord’s options to recover rent. In England and Wales the “relevant period” preventing a right of re-entry or forfeiture for non-payment of rent by commercial tenants was extended to the 25 March 2022 having been extended a number of times since the 26 March 2020.
Post pandemic lock-downs and we are slowly seeing a return to normal. But, some sectors continue to remain closed, including nightclubs and the hospitality sector. Addressing those businesses that continue to struggle, the latest extension in June 2021 came as the Communities Secretary announced that legislation will be introduced with the aim of ring-fencing unpaid rent with landlords expected to make allowances. What this actually means and how it is enforced we shall have to wait and see but it is likely to range from waiving arrears to long-term repayment plans. A binding arbitration process has also been suggested to help those on a cliff edge due to mandatory lock-downs.
Until the changes are announced, no conduct by or on behalf of a landlord is to be regarded as waiving a right of re-entry or forfeiture for non-payment of rent, unless the landlord gives an express waiver in writing (section 82(2) of the Coronavirus Act 2020). Unless there are further extensions of the moratorium, the landlord can re-enter after 25 March 2022. Indeed, the government is making clear that businesses who are able to pay rent, must do so. Tenants should start paying their rent as soon as restrictions change, and they are given the green light to open.
Somewhat buried by the news of the extension of the moratorium was the governments promise to extensively review the Landlord and Tenant Act 1954. We have little detail at the moment but watch this space!
For more information please contact Kuldip Matharoo.