Commercial Landlord remedies during Covid-19
19th May 2020
Many landlords are trying to find ways to work with their tenants during this time by offering concessions to reduce the risk of vacant properties and tenant insolvency. However where this is not an option, either due to the persistent default of an agreement or a tenant’s is refusing to communicate with their landlord the Government has issued guidance under the Coronavirus Act 2020 as to what a commercial landlord can and cannot do.
Forfeiture for commercial tenants has been suspended until at least 30 June 2020.
Commercial landlords can however seek a right of re-entry or forfeiture for other breaches of a lease.
Any existing possession orders are extended and the tenant does not need to give up possession before 30 June 2020 (this could be extended)
Any applications made from 27 April 2020 will be reviewed by the court and if the tenant is unable to pay due to Covid-19 then the petition will not go any further, if the tenant is unable to pay for another reason the petition will continue but will be postponed until a later date not yet set.
Commercial Rent Arrears Recovery
This is still available but has been changed and the tenant must now owe at least 90 days arrears, this is intended to allow tenants flexibility with their finances during this time.
No statutory demand can be served on a tenants until at least 30 June 2020, however demands for payment can still be made against Guarantors and potentially the original or previous tenants as this is not prohibited under the act.
Depending upon the terms of the rent deposit, the landlord may be able to draw on this to receive payment of rent.
The aim of the above measures is to encourage landlords and tenants to communicate and come up with a suitable resolution where they are able to do so.
If you are a commercial landlord or a tenant facing issues, please contact us for advice.
Richard Etheridge 01603 675627
Bruce Faulkner 01603 675608
Litigation and Insolvency
Peter Hastings 01603 675639
Maria Taylor 01603 675613