Good news for businesses struggling to pay rent

Stephanie Whitchurch advises businesses struggling to pay rent and landlord wishing to pursue rent arrears
July 26, 2021
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On 16 June 2021, the Government announced that it will be extending the moratorium on the forfeiture of a commercial lease and CRAR (commercial rent arrears recovery) until 25th March 2022 as part of the emergency Coronavirus Act 2020 (the Act). 


Good news for businesses struggling to pay rent

Their main objective in doing so is to protect jobs, by allowing businesses to continue to trade when they are struggling to pay their rent due to the pandemic and lockdown restrictions. The extension means that commercial landlords will continue to be precluded from forfeiting commercial leases and evicting the tenant for non-payment of rent. 

When the moratorium was first introduced last year, the Government encouraged landlords and tenants to resolve debt issues through negotiation or arbitration. 

There was a call for evidence in April 2021 and, as a result, the Government now plans legislation, to be introduced in the current session of parliament, to support the orderly resolution of such debts. It will include a backstop however: when negotiation is not successful, both parties will be required to undertake compulsory arbitration. 

The Government stated that tenants should start to pay rent either in accordance with their lease or with the arrangements they have agreed with their landlord following guidance set out in the Code of Practice governing commercial property relationships which was introduced in June 2020. 

Stephanie Whitchurch from Tallents Solicitors commented that Section 82 of the Act is expressed to apply to a ‘relevant business tenancy’ and precludes the landlord from effecting a right of re-entry or forfeiture for the non-payment of ‘rent’ for the ‘relevant period’. 

In some cases, landlords are still able to pursue debt claims for the recovery of commercial rent arrears through the county courts by raising a claim for the arrears and then transferring the judgment to the High Court for enforcement under a writ of control. 

The writ will be valid for 12 months and does mean that the enforcement agent may also take control of goods at other sites where the tenant operates, not just at the demised premises. 

Landlords wishing to pursue debt claims should seek legal advice first

Stephanie advises that landlords who wish to pursue debt claims seek legal advice first to ensure that they are not contravening the guidelines.

If you would like to find out more about your options, please call Tallents Solicitors on 01636 671881 and we can discuss your options in more detail. 

commercial rent arrears recovery CRAR forfeiture of a commercial lease pursue debt claims recovery of commercial rent arrears resolve debt issues
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