Update – Covid-19: protection from eviction for commercial tenants
8 July 2020 by Sarah Shea
Further to our initial blog in relation to the proposed protection from eviction for commercial tenants, the Coronavirus Act 2020 received Royal Assent and came into force on 25th March 2020. This emergency legislation was pushed through Parliament before its early Easter shutdown, in view of the pandemic and the need to social distance.
Section 82 of the Coronavirus Act 2020 provides details as to how exactly commercial tenants will be protected from eviction during these unprecedented times.
- Subsection (1) confirms that 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 “relevant period” is currently 26th March 2020 to 30th June 2020, with an option to extend this period by statutory instrument, should this become necessary.
- Subsection (2) provides that during the relevant period, no conduct by the landlord (other than express waiver in writing) is to be regarded as waiving a right of re-entry or forfeiture of a business tenancy, for non-payment of rent. This protects the landlord’s position if there are breaches of the lease prior to 26th March 2020, for which the landlord may wish to forfeit to the lease, but is unable to do so due to this emergency legislation.
Provision has also been made for proceedings which commenced in the High Court or County Court before 26th March 2020 to enforce a right of re-entry or forfeiture. During the relevant period, any order made in favour of the landlord is not to require the tenant to return the property to the landlord before 30th June 2020.
What happens if an Order has already been made?
If an Order has already been made (meaning that the tenant will be evicted between 26th March 2020 and 30th June 2020), the Court must ensure that if the tenant applies to vary the Order before they are required to hand back possession of the property, the tenant does not have to return the property to the landlord before 30th June 2020.
- Subsection (11) of the Act also confirms that in the future should a landlord wish to remove a tenant from the property on the basis of a persistent delay in paying the rent, any delay during the period 26th March 2020 to 30th June 2020 is to be disregarded.
Update – July 2020
The Government has since introduced secondary legislation to extend the relevant period, so that this now expires on 30th September 2020. These regulations came into force on 29th June 2020.
To help you manage the impact of coronavirus across your business we have established dedicated teams in all key practice areas. Contact the Fisher Jones Greenwood quick response team on 01206 700113 (initial telephone advice will be free of charge) or email [email protected].
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