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Insights

Extension of Forfeiture Restrictions is good news for Commercial Tenants – Landlords not so much

Posted on 19th March 2021 in Property Litigation

Posted by

Josh O’Neill

Solicitor
Extension of Forfeiture Restrictions is good news for Commercial Tenants – Landlords not so much

Extension of Forfeiture Restrictions is good news for commercial tenants, but not so much for landlords.

In response to the UK Government’s road map out of the pandemic, restrictions on commercial lease forfeiture for rent arrears imposed by the Coronavirus Act 2020 are set to be extended until 30 June 2021. The restrictions prevent forfeiture for rent arrears irrespective of the financial status of the tenant and whether or not they are in fact trading and able to pay. For many landlords the extension will be an unwelcome restriction on their ability to manage their properties. Some have not been receiving rent for over a year and, if allowed to do so, could re-let to viable rent paying businesses eager to take premises. 

However, landlords do have the satisfaction of knowing that whilst the restrictions remain in place, they will not be treated as waiving their rights to forfeiture unless they do so expressly.  This means that landlords can receive payments and have discussions about rent with tenants without the risk of losing their right to forfeit when the restrictions are eventually lifted. Landlords are also able to threaten or commence County Court debt proceedings for a money judgment for unpaid rent. That prospect may encourage tenants to pay what they can or persuade them to surrender premises to enable new leases to be granted to viable rent paying tenants.

 

Landlords with commercial premises occupied by tenants in arrears are encouraged to contact our dedicated team for urgent advice on their options.

Contact our expert lawyers

 


 

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