Extension of Protection for Business Tenancies

The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No2) Regulations 2021 (SI 2021/732) (“The Regulations”) came into force on 30 June 2021. They extend the protections set out in section 82 of the Coronavirus Act 2020, which provide that the right of re-entry for non-payment of rent in relevant business tenancies may not be enforced during the relevant period. The relevant period was due to end on 30 June 2021 but has been extended to 25 March 2022. The Government states this is to enable sectors who were unable to open due to the restrictions to have enough time to come to an agreement with their landlord without the threat of eviction.

By changing the date in section 82 of Coronavirus Act, the Regulations automatically extend the restrictions on the use of commercial rent arrears recovery (CRAR) in regulation 52(3) of the Taking Control of Goods Regulations 2013 (SI 2013/1894). The minimum net unpaid rent that must be outstanding before CRAR can be exercised is now 554 days.

The Government has also announced that legislation will be introduced in the current parliamentary session to ringfence outstanding unpaid rent that has built up where businesses were forced to remain closed during the course of the pandemic. Agreement should be reached between landlords and tenants as to how to deal with the arrears, e.g. waiving part or agreeing a longer term repayment plan.  In cases where agreement cannot be reached, a binding arbitration process will be put in place to enable the parties to come to a legally binding agreement which they must adhere to. The Government’s press release can be found here.

We have previously discussed the options open to landlords who are faced with a tenant not paying rent here. Should you require advice on your specific circumstances, please contact Sarah-Kate Jackson or Claire Mac Mahon, our property litigations specialists.