Landlords prohibited from forfeiting commercial leases until 30 June 2020

The UK Government has announced that commercial landlords will be unable to forfeit commercial leases and evict tenants for not paying their rent. This measure is in response to the ongoing COVID-19 pandemic and will be in place until 30 June 2020.

Since this article was written, the moratorium on forfeiting a commercial lease for non-payment of rent has been extended to 25 March 2022.

BDB Pitmans’ commercial litigation team answer some frequently asked questions regarding this development below.

The tenant is not paying the rent. Can the landlord forfeit the lease?

Under the new temporary legislation, if a tenant is not able to pay the rent a landlord cannot forfeit the lease for non-payment of rent until 30 June 2020 (or later if agreed). As a consequence, any commercial tenant can for any reason not pay its rent on the next quarter falling due this month, safe in the knowledge that the lease cannot be forfeited.

Should the landlord keep chasing for rent in the meantime to remind them of their obligations or put on a rent stop?

No, conduct by the landlord will waive its right of re-entry or forfeiture for non-payment of rent, unless done so expressly. A landlord can keep sending rent demands and take action to forfeit after the period ends.

Can the landlord issue a debt claim for the rent arrears or take other action?

Yes, a landlord can still issue any civil proceedings during this period. Given the current situation and depending on the tenant’s circumstances, a landlord must make a decision as to whether or not this is the best way to obtain the rent.

No other methods of enforcement have been suspended in this temporary legislation, including the right to serve a statutory demand but as this is an ever evolving situation, the position may change.

What is the situation if possession proceedings have already been issued?

If possession proceedings are already underway the possession date will not be ordered before 30 June 2020. It is irrelevant whether or not the reason for non-payment was due to COVID-19. If a landlord has a date for possession ordered before the 30 June 2020 already, the tenant can apply to have the order postponed until after 30 June 2020.

Will this definitely be the case until 30 June 2020 or is it subject to change?

The bill is expected to be enacted by Friday 27 March 2020 and the dates and details may of course be subject to change.

For more information please contact Simon Painter.