Many tenants will now be considering whether to pay their rent. Yesterday (23 March) the Government announced that the three month moratorium of evictions for residential property will be extended to commercial property in the emergency Coronavirus Bill currently going through Parliament. Commercial tenants who cannot pay their rent because of the impact of COVID-19 will be protected from eviction (forfeiture) during this period. However, the tenant will will remain liable for the arrears (so the threat of eviction will loom after the three month or any extended period has ended). The Government recognises many tenants and landlords are already talking and agreeing rent holidays and rent reductions during this exceptionally challenging period. Parties are urged to continue these conversations to agree voluntary arrangements on rent. However, this measure could mean landlords, who so far have been reluctant to enter into such conversations, become more willing to enter into such dialogues in order to receive at least a proportion of rent during this period.
Landlords will no doubt be very concerned for their cashflow as it is expected that many tenants will cancel their quarter rent payment due tomorrow (25th
March). Many landlord too have onward commitments, and further Government support for landlords may be needed. Tenants who are thinking of withholding rent will need to consider if they have given rent deposits, and the potential consequences when the forfeiture ban is eventually lifted of accruing arrears and default interest.
Extra protection for businesses with ban on evictions for commercial tenants who miss rent payments
If you would like to speak to someone within our Commercial Property team please contact our offices on 01228 552222 or e-mail email@example.com . Please note that both telephone and video appointments can be arranged during this period of self-isolation.