By way of update on the article published on 30 March the Government announcement on 24 April placed further restrictions on Landlords seeking to recover rent from Tenants.
The Coronavirus Bill was first introduced at the end of March with the most significant development for the landlord and tenant sector being that tenants of commercial premises will not be evicted from their premises until the end of June 2020 if they are struggling to pay their rent. The protection has now been extended to the extent that Landlords are prohibited from landlords from issuing and serving statutory demands on tenants who are in arrears and “cannot pay” and/or from issuing a petition to have the tenant made insolvent. This protection is also in place until 30 June 2020.
We will be keeping a close eye on the drafting of the legislation, particularly in light of the fact that whilst the purpose of protection appears to be to protect only tenants who “cannot pay” there was some suggestion during the announcement that all debt recovery action against tenants from now until the end of June will be void.
In the meantime, it is encouraged that dialogue is maintained between landlords and tenants to agree mutually acceptable terms or compromises as a result of the Covid-19 restrictions that are currently in place. Parties should seek advice on any short term measures to ensure that any changes to the lease arrangements does not result in a permanent variation to the terms of the lease.
The Government has not yet taken action to protect landlords affected by Covid-19 issues i.e. to prevent lenders from enforcing on landlords when their event of default is due to the tenant’s failure to pay rent. We will let you know if this changes.
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Head of Commercial Property
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