Coronavirus affects right to forfeit commercial leases

Recent amendments proposed to the Coronavirus Bill will affect a commercial landlord’s right to forfeit a lease for non-payment of rent.  The proposals relate to tenancies to which Part 2 of the Landlord and Tenant Act 1954 applies, or tenancies to which Part 2 would apply if any relevant occupier were the tenant.

Once live, the changes will be in force until 30 June 2020, although that date can be extended. Rent will include any sum that a tenant is liable to pay under a relevant business tenancy.

The amendments summarised:

• The landlord’s right to re-enter the property or forfeit the lease if rent isn’t paid is restricted until 30 June 2020 (or later if extended).
• No conduct by a landlord, other than an express waiver in writing, is to be regarded as waiving a right of re-entry or forfeiture under a relevant business tenancy for non-payment of rent.
• There are amendments to one of the grounds of opposition to a new tenancy (set out in section 30 (1) of the Act), specifically ground (b) – persistent delay in paying rent. Failure to pay rent during the relevant period (i.e. until 30 June 2020 – or later if extended) will not be taken into account in determining whether ground b is made out. This applies whether the rent was due before or in that period.
• The proposals also impact on proceedings for possession of commercial premises in the Courts.

If you need any help or advice on your position then please contact any member of our Real Estate Dispute Resolution team.