Further Extensions to the Protections from Forfeiture for Non-Payment of Rent and Recovery of Rent by CRAR for Business Tenancies

Further Extensions to the Protections from Forfeiture for Non-Payment of Rent and Recovery of Rent by CRAR for Business Tenancies

Key Contact: Jennifer Butcher

Author: Abby Stephens

On 9 December 2020, Communities Secretary Robert Jenrick announced that business owners affected by the COVID-19 pandemic will be protected from eviction until the end of March 2021. The announcement confirms that the following restrictions will be extended until 31 March 2021:

  1. The protections from forfeiture for business tenancies for non-payment of rent; and
  2. The restrictions on landlords recovering unpaid rent by the exercise of commercial rent arrears recovery (also known as CRAR).

The protections for business tenancies have been documented in Wales by the Business Tenancies (Extension of Protection from Forfeiture etc) (Wales) (Coronavirus) (No 3) Regulations 2020 (SI 2020/960), which will come into force on 31 December 2020, and similarly in England by the Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No 3) Regulations 2020 (SI 2020/1472), which will come into force on 30 December 2020.

We have previously looked at the extensions of protection against forfeiture of business tenancies in England and Wales and this further extension brings the total length of time that business tenants have been given protection to 1 year.

As a result of changing the date in section 82 of the Coronavirus Act 2020, these regulations in turn automatically extend the restrictions on the use of CRAR in regulation 52(3) of the Taking Control of Goods Regulations 2013 (SI 2013/1894), which will allow businesses additional time to pay any rent owed.

The UK government acknowledge that the majority of commercial landlords have shown flexibility and understanding in protecting businesses during what has been a challenging year and have stated that the final extension to protections from the threat of eviction will give landlords and tenants 3 months to come to an agreement on unpaid rent, however where businesses can pay any or all of their rent, they should look to do so. Further guidance to support negotiations between landlords and tenants is expected to be published shortly. It has also been announced that a review of the outdated commercial landlord and tenant legislation will be carried out, including consideration of Part II of the Landlord and Tenant Act 1954, to address concerns under the current framework.

If you are a Landlord or Tenant of Commercial Premises and require advice in relation to the above issues, please contact our Litigation Team.

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