On 10 March 2021, the UK Government announced its plans to extend to 30 June 2021 the protection given to business tenants against forfeiture of leases for non-payment of rent. This is the fourth time that the protection has been extended since March 2020.
Section 82 of the Coronavirus Act 2020 prevents landlords from using a right of re-entry to bring a business tenancy to an end on the basis of non-payment of rent (including any other sums payable under the tenancy) during the "relevant period" as defined in the legislation.
Currently this "relevant period" is set to come to an end on the 31 March 2021. However, the newest announcement will see legislation change the end date to 30 June 2021.
Relevant legislation has yet to be published but it is expected that the extension will be on the same terms as previously and tenants will not need to show that non-payment of rent or other fixed sum is COVID-19 related. However the Government have stated that those tenants who are able to pay their rent should do so.
The Government have made it clear that its position is to support commercial landlords and tenants to agree their own arrangements of paying off debts by way of negotiations. Further guidance is expected which aims to support negotiations between landlords and tenants at this time but the Government has stated that, if negotiations do not take place, further steps may be taken.
To that end, the Government will launch a call for evidence on commercial rents to help monitor the progress of negotiations. This call for evidence will also set out potential steps the Government may take after 30 June 2021 which may include a phased withdrawal of current protections and legislative intervention to target businesses most affected by the pandemic.
Further extensions have also been announced in relation to the existing protection for tenants against Commercial Rent Arrears Recovery (CRAR). The current protections are set to come to an end on 31 March 2021 but will now run until 30 June 2021 and state that:
- if a notice of enforcement is given, or where goods are taken control of, on or before the 23 June, then 457 days' rent must be in arrears
- if a notice of enforcement is given, or where goods are taken control of, on or after 24 June, then 554 day's rent must be in arrears.
Of additional note is the announcement that the Government's review of the current landlord and tenant legislation framework is to take place later in the year.