A stay on business tenancy terminations
The Coronavirus Act 2020 (“the Act”) came into force on 25 March 2020. For landlords and tenants in England and Wales, the Act immediately prevents a landlord from terminating certain business tenancies by forfeiture for non-payment of rent until 30 June 2020. There are powers within the Act for this date to be extended.
The restriction applies to forfeiture by the landlord instructing a bailiff to change the locks as well as to forfeiture proceedings in the Court.
What tenancies do the restrictions apply to?
The Act states that the restrictions benefit any business tenancy to which Part 2 of the Landlord and Tenant Act 1954 (“the 1954 Act”) applies. The Explanatory Notes accompanying the Act confirm that the Government intends these also to apply to leases where the protection of the 1954 Act has been excluded. The provisions seek to cover lawful subtenants also.
Do the restrictions apply just to unpaid rent or to other payments under the lease?
The restrictions apply to the failure to settle any sum payable under the relevant business tenancy including rent, insurance, service charges and interest.
If the landlord enters into discussions with a commercial tenant in relation to the sums owed, could it lose the right to forfeit for non-payment of these sums?
Not at present. The Act states that the landlord’s conduct during the relevant period (currently due to end on 30 June 2020) will not be treated as waiving the right to forfeit for the non-payment of rent unless the landlord gives an express waiver of the right to forfeit in writing (which is unlikely). In effect, the landlord’s right to forfeit for unpaid rent is “frozen” until 1 July 2020.
What about existing forfeiture proceedings?
Courts will now not be able to make a possession order which requires a tenant to give possession of business premises to the landlord before 1 July 2020. Indeed, a new CPR Practice Direction introduced on 27 March 2020 has made it clear that any proceedings seeking to enforce an order for possession by a warrant or writ of possession are now stayed for 90 days, as are all new claims for possession brought under CPR Part 55.
In this fast moving period of unprecedented change, if landlords or tenants have any further questions about the operation of the Act and how it may affect them, please do not hesitate to contact Emma Humphreys, Laura Bushaway or your usual Charles Russell Speechlys contact.
The restrictions detailed above have been extended. Please refer to our latest guidance on our September 2020 Quarter Day page which can be found here.
Sponsor Licence Compliance: Key considerations & how to be audit ready
Join us for the third in our series of mini webinars on post Brexit immigration about sponsor licence compliance.
The Future of Property Careers
Join to our panel discussion and Q&A with industry leaders on the range of opportunities within the property and construction sector.
Can a restrictive covenant become obsolete?
Q&A on adverse possession
A successful application for title by adverse possession will result in the squatter acquiring possessory title to land.
New tax on property developers - consultation paper published
The government published a consultation paper on the design of the new residential property developers tax.
Oliver Park writes for LexisPSL Property Disputes on liability for costs of repair
Oliver considers the implications of the decision in City of London v Leaseholders of Great Arthur House.
Procuring modular housing: Is MMC becoming mainstream?
Is Modern Methods of Construction becoming mainstream? Read what it means for Development and Procurement here.
Dual class share structures: how do they work and what are the pros and cons?
Dual class share structures allow a shareholder, for example the founder, to retain voting control over a company.
Q&A: Talking the telecoms talk
Georgina Muskett and Jonathan Wills answer queries on Electronic Communications Code agreement.
Property Patter: Navigating the complexities of Pharmacy Property
Pharmacy property is a specialist area which contains many traps for the unwary.
COVID-19 Vaccination – can an employer make it compulsory for employees?
We review what legal issues to take into account when considering to make vaccination compulsory as an employer.
Linking ESG and Executive Pay
How does a business go about embedding a focus on strong ESG performance into the structures and culture of its organisation?
National Security and Investment Act granted Royal Assent
The Act establishes a new regime for the review of mergers, acquisitions and other transactions that could threaten national security.
Recent Trends In Firewall Legislation: BVI, Bermuda And Gibraltar
Charles Russell Speechlys advises Waverton on acquisition of Cornerstone Asset Management
Established in July 2010 and with offices in Edinburgh and Glasgow, Cornerstone offers wealth management and financial planning advice.
What do the new Debt Respite Scheme Regulations mean for Landlords and Tenants?
This will provide legal protection from creditors in the form of either a breathing space or a mental health crisis moratorium.
Charles Russell Speechlys promotes five to Partner
The promotions are effective 1 May 2021 and are accompanied by one Legal Director and 15 Senior Associate promotions.
Risk allocation in commercial leases: the High Court considers rent suspension, insurance and frustration arguments
Read our summary of the full judgement on the latest Covid arrears case.
Charles Russell Speechlys boosts private wealth offering with the hire of an international tax team
Robert Reymond will be joined at the firm by Leigh Nicoll, Emma Tyrrell and Oliver Cooper.
Proposed Takeover Code Amendments – Key Changes
The Consultation Paper has now been followed by a corresponding response paper which made certain modifications to the initial proposals.