Commercial Property – restrictions extended for non-payment of rent

As we all know, there have been restrictions on the options open to landlords for non-payment of rent since March 2020. With the pandemic still in full flow there was speculation that these might be extended into next year.

That speculation has now come to an end with communities Secretary Robert Jenrick announcing that the restrictions on landlords taking action for non-payment of rent by business tenants are being extended until the end of March 2021.

The government is very much of the view that those business able to pay rent should continue to do so, however:

• The forfeiture of business leases for non-payment of rent by landlords will not be permitted before the end of March 2021.
• CRAR will not be available to landlords until the end of March 2021.
• Landlords will not be able to petition to wind up a company on the strength of a statutory demand served on or after 1 March 2020 until the end of March 2021.
• The winding up of a company for failure to comply with a statutory demand will be impossible unless it can be demonstrated that the company has not been affected by the pandemic or that the action would have been brought regardless. No easy feat.

It remains vital, therefore, that an open and constructive dialogue is maintained between landlords and tenants and payment plans, rent holidays, rent free periods, and deferred rent reviews are considered as a middle ground between the parties. 

More information

Our Commercial Property Team is happy to discuss and assist in and document any negotiations between parties.

This article was written by Julien Pritchard, Partner in our Commercial Property Team. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of December 2020.