Restrictions on evictions, is the end near?

Last year, we saw unprecedented protection for commercial tenants. For the first time landlords were (and still are) unable to recover commercial premises due to rent arrears.

In our previous articles in this series we have considered the protections/restrictions and updated you on their extensions. Our previous articles can be found here:

Last Chance Saloon for Business Tenants

Protection from forfeiture for commercial rent arrears extended

Tenant Evictions During COVID

Protection for Commercial Tenants Extended Again

Coronavirus: Commercial Tenants In Rent Arrears - Get Protected

In December 2020, the government announced a ‘final’ extension of these restrictions until 31 March 2021. However in light of the country’s third national lockdown which, sadly, does not yet have an end in sight we suspect the final extension is yet to come.

The following table summarises some key enforcement methods when it comes to commercial rent arrears and explains how these have been restricted and when those restrictions are currently set to end.

Enforcement methodRestrictions imposed Expiry Date Forfeiture of commercial leases for non-payment of rentThe right to forfeit is on hold unless the tenant agrees to waive this in writing 31 March 2021Seizure of goods under the Commercial Rent Arrears Recovery scheme (CRAR)

CRAR could only be exercised between 29 September 2020 – 24 December 2020 where an amount equal to 276 days’ rent was outstanding.

Now (from 25 December 2020), CRAR can only be exercised where an amount equal to 366 days rent is outstanding

CRAR could only be exercised between 29 September 2020 – 24 December 2020 where an amount equal to 276 days’ rent was outstanding.

Now (from 25 December 2020), CRAR can only be exercised where an amount equal to 366 days rent is outstanding.

31 March 2021

Winding-up petition/ Statutory demands

Landlords must show, for petitions presented from 27 April 2020, the pandemic has not worsened the tenant company’s financial positon; or that the tenant company would have been unable to pay its debt regardless of the pandemic.

Statutory demands can still be served but any statutory demand served on a company on or after 1 March 2020, cannot form part of a winding-up petition.

There are no restrictions on landlords’ ability to serve statutory demand or institute bankruptcy proceedings against an individual tenant/guarantor.

31 March 2021Opposing a tenant’s lease renewal rights on grounds of non-payment of rent Landlords are unable to rely on a tenant’s non-payment of rent to oppose a new tenancy pursuant to the Landlord and Tenant Act 1954

31 March 2021

The following enforcement methods remain available to landlords looking to recover unpaid rent:

• Drawing down on rent deposits and asking tenants to top these up;
• Pursuing current guarantors;
• Claiming against an Authorised Guarantee Agreement (AGA);
• Issuing possession proceedings based on other breaches of covenant; and
• Ordinary debt recovery proceedings in the High/County Court.

Whether you are a landlord looking to recover rent arrears or forfeit a lease, or a tenant facing such measures, our experienced Property Disputes Team is here to help guide you throughout this process. Please do not hesitate to contact us by email or by calling 01603 610911.

Note: the contents of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any particular circumstance. This is also a constantly developing area, with the Government currently issuing additional measures and updates on a daily basis and further legislation is expected to be passed in the near future, and we cannot guarantee the contents are up to date. Follow the Leathes Prior socials (Linkedin, Twitter & Facebook) for the latest updates.