Updated Business Tenancies Moratorium
Key Contact: Jennifer Butcher
Author: Emma Poole
Following the Welsh Government’s announcement last week (please read previous article here), The Ministry of Housing, Communities and Local Government has announced that an extension to the moratorium of forfeiture of business tenancies in England under the Coronavirus Act 2020 (“the Act”) will also be granted until 31 December 2020.
Whilst the Act prevents them from exercising their right to forfeit a business tenancy for late payment of rent until 31 December 2020 (or such later date specified by further amendments), landlords still have the ability to recover rent and other sums due by other means. For instance, a landlord might seek to recover rental arrears and other sums due under the tenancy from former tenants who have covenanted to be liable until the business tenancy ends, or guarantors. Alternatively, the landlord could also pursue a tenant (or sub-tenant) under the Commercial Rent Arrears Recovery (CRAR) rules.
In line with its response to the coronavirus pandemic, the Government implemented the Taking Control of Goods and Certification of Enforcement Agents (Amendment) (Coronavirus) Regulations 2020 (the CRAR Regulations) which restricted landlords’ use of CRAR if rent was in arrears for less than 90 days. This was subsequently increased to 189 days’ rent from 24 June, to 276 days’ from 29 September, and will rise to 366 days’ rent from 25 December.
If you are a Landlord or Tenant of Commercial Premises and require advice in relation to the above issues, please contact our Litigation Team.