Due to temporary restrictions imposed as a result of the Coronavirus pandemic, landlords are currently prohibited from forfeiting commercial leases for non-payment of rent, and limited to exercising CRAR only when over two quarters’ rent is in arrear.

This week, the Government has announced that the current restrictions on forfeiture for non-payment of rent will be extended beyond the current expiry date of 30 September 2020 to 31 December 2020.

The Government are also increasing the amount of unpaid rent which will be required to exercise CRAR:

  • Where the notice of enforcement is given on or before 24 December 2020, there must be arrears of 276 days’ rent to exercise CRAR;
  • Where the notice of enforcement is given on or after 25 December 2020, there must be arrears of 366 days’ rent to exercise CRAR.

The statutory instruments implementing the changes will come into force on 29 September 2020.

The prohibition on serving statutory demands and issuing winding-up petitions is still set to expire on 30 September 2020, but Government confirmation on the position is awaited and extensions are expected.

  • Both landlord and tenant groups have been urging the Government to take further action. 
    • Landlords have expressed concern that large businesses who can afford to pay rent are taking advantage of the current restrictions.
    • Commercial tenants, such as restaurant groups, have been lobbying the government to extend the moratorium deadline and also to restrict landlords from claiming back full arrears when the deadline ends.   As things stand, rent is still falling due and will be recoverable with interest unless agreements have been reached between parties.

Our Property Litigation Team is on hand to help.