The final extension? Restrictions on remedies for commercial landlords extended further

21st December 2020

In a move to further support businesses during the pandemic, the government announced that the measures in place restricting what a landlord can do where a tenant is not paying rent   have been extended to 31 March 2021 from 31 December 2020 (we discuss 31 December extension in our article here). Despite the news of a vaccine, given the rising Covid-19 rates over the winter period, this further extension is not surprising.

The restrictions which have been extended are:

  • The moratorium on forfeiture of commercial business premises
  • Restrictions relating to statutory demands and winding-up petitions
  • A landlord’s ability to exercise Commercial Rent Arrears Recovery (CRAR).

The extension to the forfeiture moratorium has been described as the final extension. This will undoubtedly be welcomed by many landlords, particularly since, on 31 March 2021, it will be over a year since this restriction was put in place.

To bolster the restrictions, in June 2020 the government published a Code of Practice encouraging commercial landlords and tenants to work together to navigate through the pandemic. Additional guidance is expected in the New Year which is to sit alongside the code. As the Code is not mandatory, it remains to be seen whether any further guidance will have a meaningful impact.

In addition to the above, the government also stated that there will be a review of landlord and tenant legislation in the New Year. This has been prompted by the pandemic and its purpose is to consider Part II of the Landlord and Tenant Act 1954, models of rent payment and the impact of Covid-19 on the commercial property market.

On the whole it appears that the end is in sight for commercial landlords, but this is likely to cause concern for commercial tenants – many of whom may not be able to return to pre-Covid-19 trading levels by 31 March 2021. Although your reaction to this may be dictated by whether you are a landlord or a tenant, one thing is clear; change is afoot for commercial landlords and tenants in 2021.

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