Coronavirus and Commercial Rent Payments

The Coronavirus Bill was passed on the 25 March. Section 82 of the Bill contains provisions to ensure that no business will be forced out of their premises if they miss a payment in the next 3 months.

Most leases contain provisions allowing a landlord to terminate the tenancy in the event that the tenant fails to pay the rent for a certain period after it is due (often 14 or 21 days). The landlord often peaceably re-enters the premises and changes the locks, which brings an end to the lease, but other methods of forfeiture are available, including court proceedings.

With the Coronavirus Bill, landlords will not be able to forfeit commercial leases of “relevant business tenancies” until the moratorium ends. The initial moratorium will run until 30 June 2020 and will be reviewed.Forfeiture will not be permitted for unpaid rent or any other sums due under the lease, whether or not the non-payment is due to Coronavirus issues. Rent will still continue to accrue under the terms of the lease unless the landlord expressly and in writing waives the obligation to pay rent.

This has already affected landlords whose rent was due on the quarter day that has just passed. As the moratorium will continue until at least the end of June it will also affect landlords who are expecting to receive rent on the next quarter day.

The Government says that it is also actively monitoring the impact on commercial landlords’ cash flow and continues to be in dialogue with them.

For more information on what this update will mean for you and your business, get in touch with our Commercial Dispute Resolution team. Email us at info@ramsdens.co.uk or call us on 01484 821 500 to speak to a member of our team.