It has been announced that Landlords of commercial premises will not able to evict their tenants for non-payment of rent, using either peaceable re-entry, or by using the s.146 notice procedure. This will apply for a minimum period of the date upon which the Coronavirus Act 2020 comes into force until at least 30 June 2020.
It also appears, from the wording of s.82(1) of the Coronavirus Act 2020, that this prohibition will also apply retrospectively. As Such rent arrears which have been incurred prior to the commencement of the Coronavirus Act 2020 will not allow enforcement by peaceable re-entry or forfeiture.
s.82(1) states:
‘A right of re-entry or forfeiture, under a relevant business tenancy, for non-payment of rent may not be enforced, by action or otherwise, during the relevant period’
The wording ‘during the relevant period’ is conspicuous by its absence after ‘…for non-payment of rent…’. It seems this is an intentional omission by the legislature as s.82(3) – s.82(10) then deals with proceedings which are already issued in court.
The crux of s.82(3) – s.82(10) is to compel High Court and County Court Judges to suspend any possession order until the end of the relevant period, which as drafted, stands at 30 June 2020 with the option for that period to be extended.
The Act does not stretch so far as to prevent recovery of Rent Arrears and therefore it would seem that alternative methods of enforcement such as Commercial Rent Arrears Recovery (CRAR), or money claim proceedings, will remain a viable option for Landlords.
It could be said that the Act encourages enforcement using this route, as the consequence of s.82(2) is to allow enforcement by CRAR or by money claim proceedings, without waiving the ability to effect forfeiture. Traditionally any attempt to enforce for rent arrears pre-forfeiture would likely have waived a Landlord’s ability to effect forfeiture until a new breach had occurred (i.e. the Tenant then failed to pay next month’s rent).
There remains one occasion during this temporary period where existing rent arrears will be a relevant consideration for the purposes of bringing a lease to an end.
This relates to the ability of a Landlord to refer to rent arrears when objecting to a Tenant’s lease renewal. s.82(11) of the Coronavirus Act 2020 confirms that a Landlord can still object to a lease renewal request as a result of a Tenant’s persistent delay in paying rent; however any delay in paying rent between the commencement of the Coronavirus Act 2020 and 30 June 2020 (or later date yet to be confirmed) cannot be relied upon as evidence to illustrate a persistent failure to pay rent.
If you would like to discuss this in more detail, please contact our Head of Property Litigation, Adam Hollis, by calling 0114 218 4000 or email Adam.Hollis@tayloremmet.co.uk
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