Commercial Tenants – Government brings in protections for Commercial Tenants due to COVID-19

The Government have announced that commercial tenants who are unable to pay rent due to Covid-19 have protections from forfeiture of their lease for non-payment of rent until 30 June 2020 (currently).

Parliament are discussing and putting through an Emergency Coronavirus Bill which is expected to be passed very shortly. This Bill stipulates that landlords cannot evict commercial tenants whether by court action or by peaceable re-entry and the tenant cannot be forced out of the premises if a payment is missed in the next 3 months.

Many landlords and tenants would have already started these conversations with voluntary arrangements due to the spring quarter payment, in most cases, due today (25 March) as businesses struggle with their cash flow due to the current crises however, the Government recognises that businesses are still worried about eviction.

This provision will only, however, delay the right to forfeiture and it does not affect a landlord’s right to claim forfeiture or recover rent after this 3 month period has ended and commercial tenants will still be liable for rent after this period. The Government are actively monitoring the impact that this could have on commercial landlords’ cash flow and continue to remain in dialogue with them.

The Chancellor of the Exchequer, Rishi Sunak MP, said:

“We are taking unprecedented action and doing so at unprecedented speed, because we know that businesses and their employees need help now.”

“That is why we are taking steps to change the law so that no company can be forced out of its premises due to loss of income. Alongside our support for workers and £330 billion of business loans and guarantees, this will help make a real difference to firms across the country trying to protect jobs.”

The hope is that this will also encourage conversations and arrangements between landlord and tenant to reach a solution together on payment.

The Government are quickly implementing laws and policies to assist businesses during these circumstances and as such things can and are changing very quickly.

Here at Bromleys, we are continuing to keep updated on this extremely fast paced changing and challenging situation. If you have any queries or concerns regarding this please do not hesitate to contact us on our dedicated Commercial Helpline: 0161 694 4153.