The Covid-19 outbreak and subsequent closure of all pubs, bars and restaurants meant that many operators did not pay their rent on the March Quarter Day. Whilst some landlords may have thought about forfeiting their lease the Government has stepped in to support businesses by suspending their right to do this until 30 June 2020.
The Coronavirus Bill (due to be receive Royal Assent shortly) will suspend a landlord’s ability to forfeit and or oppose a business tenancy under the Landlord and Tenant Act 1954. The headline points are:
- From the day that the bill receives Royal Assent until the 30 June 2020 (unless pushed out further) (“the Relevant Period”) a landlord may not forfeit a commercial lease for non-payment of rent.
- A landlord cannot waive the right to forfeit unless it expressly chooses to do so in writing, seemingly allowing rent deferment and payment plans to be put in place.
- If an order is made in the High Court or County Court during this period granting a landlord possession, the tenant does not have to give up possession until the end of the Relevant Period.
- A landlord cannot rely on failure to pay rent during the Relevant Period to support an application to oppose a business tenancy under the Landlord and Tenant Act 1954 on the grounds of a persistent delay in paying the rent.
An interesting point to note is that non-payment does not have to be due to Coronavirus – the legislation applies to any failure to pay. It should also be noted that tenants will remain liable for the rents, notwithstanding the provisions mentioned above.
Whilst the devil is inevitably in the detail, the legislation may at least provide tenants with some comfort that they will not lose their premises. However, a landlord still has its other remedies available and so it would be prudent for tenants to enter into dialogue with their landlords as soon as possible, to discuss how they can work together to get through the next quarter.
For more information or guidance contact Mark Brown
