Please note: The information in this article is correct as of 23/06/20. Due to the ongoing nature of the coronavirus situation, guidance is subject to change so we would always advise you speak with a solicitor for specific advice.

The Government has put into place further measures to protect commercial tenants who are struggling in the wake of COVID 19. A ban previously put into place preventing commercial landlords from evicting their tenants for non-payment of rent was due to come to an end on 30th June and ministers have now extended this until the end of September.

Many tenants will be due to pay their next rent installment tomorrow, being the usual quarter date of 24 June and will be struggling to find the cash for three months rent upfront. It is thought that only around half of all rent payments due on the last quarter date, 25 March, were made and even less is expected to be paid on Wednesday.

The Government has therefore extended the eviction ban in order to help local businesses plan for their economic recovery and to safeguard the high street. A new code of practice has also been released with the aim of assisting landlords and tenants in reaching compromises for rent payments and to support all parties. Robert Jenrick, the Communities Secretary, has commented that he hopes that the new Code helps to “unlock conversations on rent and future payments whilst ensuring best practice is displayed across the board as we confront the challenges of this pandemic”. The Code, which has been endorsed by many organisations including British Beer and Pubs Association, Property Owners Forum and Federation of Small Businesses is, however, voluntary and cannot be enforced.

Secondary legislation has also been brought into force preventing landlords from using the Commercial Rent Arrears Recovery unless they are owed 190 days rent or more. This means that only those landlords who are owed in excess of 6 months rent can begin eviction proceedings.

Finally, an amendment to the Corporate Insolvency and Governance Bill has been tabled which is intended to extend the current temporary ban on the use of statutory demands and winding up petitions on companies who cannot pay their bills due to COVID 19 until the end of September.

Farleys have already assisted many clients in agreeing rent holidays or deferrals in a bid to ease the strain on commercial tenants whilst at the same time protecting the Landlord’s position in ensuring that the arrangements reached are fully documented in order to avoid any future disputes.  For advice please contact the team today on 0845 287 0939 or complete our online contact form.