On 9 December 2020, the UK Government announced its plans to extend to 31 March 2020 the protection given to business tenants against forfeiture of leases for non-payment of rent. This is the third 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 December 2020. However, the newest announcement will see legislation change the end date to 31 March 2021.
The government has also made clear that this will be the last such extension, so tenants now face an abrupt cut-off point on protection on 31 March 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.
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 December 2020 but will now run until the 31 March 2021 and state that:
- if a notice of enforcement is given, or where goods are taken control of, on or before the 24 December 2020, then 276 days' rent must be in arrears
- if a notice of enforcement is given, or where goods are taken control of, on or after 25 December 2020, then 366 day's rent must be in arrears.
The current insolvency measures which restrict the use of statutory demands and winding up petitions will also be extended to the end of March as part of the government's package of protections.
Of additional note is the announcement that the government are considering a review of the current landlord and tenant legislation framework which it believes does not reflect the current economic conditions.
Further guidance is expected which aims to support negotiations between landlords and tenants at this time.