The Government recently announced a further extension to protect commercial property tenants until March 31, 2021.

The protection is for businesses which are struggling to cope with the effects of the coronavirus (Covid-19), particularly those in the hospitality and retail industries. The Government is clear that businesses that can pay any or all of their rent should do so.

The Housing Secretary said that this will be the 'final' extension of the ban on evictions. The extension is intended to give commercial landlords and tenants three months to come to an agreement on unpaid rent.

Under the Coronavirus Act 2020:

• Landlords cannot exercise their rights to re-enter premises or forfeit a commercial lease as a result of a tenant's failure to pay rent.

• Tenants will still be required to pay rent (and other payments) after March 31, 2021.

• Landlords can sue for rent arrears at their discretion, unless they are able to reach an agreement with the tenant to waive or defer some of the payments.

The following restrictions will also be extended until March 31, 2021:

• Landlords will only be able to exercise Commercial Rent Arrears Recovery (CRAR), if there are 366 days of outstanding rent after the December 2020 quarter's rent is due.

• The use of statutory demands and winding-up petitions being enforced by creditors on companies who are facing debts because of Covid-19.

Further guidance will be published and will sit alongside the voluntary Code of Practice for commercial property relationships during the Covid-19 pandemic.

The Government also unveiled plans to carry out a review of the commercial landlord and tenant legislation to reflect the current economic conditions. The review will consider a range of issues including ways to improve collaboration between commercial landlords and tenants and changes to the leasing process.

  • David Marsden is a partner at award-winning law firm VWV, which has offices in Clarendon Road, Watford. Get in touch on 07770 413 164 or dmarsden@vwv.co.uk