Under Section 28 of the Coronavirus Act 2020, in March 2020, the UK government put in place a moratorium which was intended to be a temporary halt of ‘business as usual’. In this case, it meant that commercial landlords could not forfeit commercial leases and could not evict tenants for non-payment of rent during the moratorium period.
Subsequent quarterly extensions set 31st March 2021 as the latest expiry date. This has now been further extended for a fourth time and will expire on 30th June 2021.
Commercial Rent Arrears Recovery (CRAR)
CRAR is a procedure for the recovery of rent arrears and the limitations on enforcing CRAR also remain in place until 30th June 2021.
Rent arrears, insurance and any service charge are still payable for the moratorium period (25th March 2020 to 30th June 2021) unless the landlord and tenant agree to a reduction, payment plan or writing off any debts. If the latter is the case, then an express waiver needs to be put in place to waive the right to forfeit when the restricted period ends. Prevention is most definitely better than cure so do speak to our commercial property experts to ensure the correct procedures and written agreements are in place to save any future legal battles and costs.
All other breaches to any covenants contained in the commercial lease are not included in the moratorium and remain enforceable.
Expectations
On 19th June 2020, the government published a voluntary code of practice for commercial landlords and tenants to equip them with a guide ‘to come together to negotiate affordable rental agreements.’ These expectations have again been reinforced and the code of practice will apply until 24th June 2021 and possibly beyond this date.
Call for Evidence
With the extended moratorium, the government has launched a Call for Evidence to assess the overall progress of commercial rent negotiations to help set out any necessary steps and improvements that may take affect from 1st July 2021
How we can help
Whether you are a commercial landlord having difficulties with a tenant or, a tenant in commercial premises experiencing issues with your landlord, we have experience of acting for both parties and there are options and solutions available to you. Contact our experts on our dedicated helpline 0161 694 4143 for your free initial telephone discussion. If you prefer, you can fill in our online form or alternatively, you can email us on bromleys@bromleys.co.uk and we’ll call you back.