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Expert Insights

29 September 2021

Commercial rent arrears: what are the latest restrictions on landlords’ remedies this quarter day?

There have been significant changes for almost all businesses in the UK as a result of COVID-19. Following the closure of most high street units and many offices during various Lockdowns, those businesses which manage to reopen will be trading under very different arrangements and face restricted operations for some time to come.

Following the swift action taken by government in March and April 2020 to alter certain rules which usually apply to the commercial landlord and tenant relationships, the remedies available to landlords have been restricted.  There is also the prospect of further long-term changes for the commercial property world, as the government has announced that it intends to undertake a review of commercial landlord and tenant legislation during 2021.  This will include consideration of Part II of the Landlord and Tenant Act 1954, different models of rent payment and the impact of COVID-19 on the market.

We appreciate the importance of landlords and tenants having a clear understanding of their legal position during this difficult time,  The current restrictions on the remedies usually available to landlords of commercial property have therefore been brought together in our updates below.

Forfeiture moratorium: 

Click here for all you need to know about the current stay on business tenancy terminations. 

Commercial Rent Arrears Recovery (CRAR): 

For the latest on the amended CRAR Regulations, click here for the detail. 

Code of Practice for commercial property relationships during the COVID 19 pandemic: 

The voluntary code encourages landlord and tenant co-operation, read our insight here. The Code will be reviewed on 25 March 2022.

Corporate insolvency changes: what do they mean for landlords and tenants? 

The restrictions on winding- up petitions were extended until 30 September 2021 – see here for further details.

From 1 October 2021 until 31 March 2022, there is a slight rule change but landlords will remain restricted from presenting winding up petitions against commercial tenants in respect of rent or other sums payable under a tenancy which are unpaid due to the financial effect of Coronavirus.  See here for more details.

For a reminder of the headline provisions from the Corporate Insolvency and Governance Act – which introduced a new moratorium available to companies who need breathing space - read our insight here

The Government has also announced that arrears which have arisen during periods where a tenant business was forced to close as a result of a Lockdown will be “ringfenced” and the parties encouraged to reach agreement regarding arrears. Where agreement cannot be reached, there will be new legislation to create a binding arbitration process. See here for further details.

This page is updated quarterly, if you have any questions, would like to discuss any aspects of this update further or receive future quarterly updates please contact Emma Humphreys or Laura Bushaway.