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Coronavirus (COVID-19): Government extends forfeiture moratorium and rent recovery restrictions for final time

14/12/2020

Last week, the government announced what it promises is the final extension to its suspension of commercial forfeiture by a further three months, to next Spring.

The moratorium, which was initially introduced in March and only intended to take effect until the end of June, has already been extended twice, first until the end of September and then until the end of this month.  This latest extension will now bring the total duration of the moratorium to just over a full year, and once it lifts on 1 April 2021 commercial landlords with leases providing for rent due on the standard “quarter days” – 25 December, 25 March, 24 June and 29 September – will have seen five of those quarter days pass without an ability to forfeit their leases for failure to pay that rent.

Whilst this announcement is unwelcome for many commercial landlords, it is not altogether unexpected.  Landlords have reached within a couple of weeks of the moratoriums’ end date twice already, only for the government to move the forfeiture goalposts, and while many were lining up bailiff appointments at the end of June in anticipation of the first suspension coming to an end, fewer and fewer have scheduled re-entries in September and December, correctly predicting that they’d only have needed to be cancelled.  With the country moving into the harsh winter months, and another national lockdown only days behind us, it seemed almost certain that this time would be no exception.

And so, in a way, this latest announcement includes a ray of good news for landlords; whilst the moratorium has been extended once again, this time the government have described it as the “final” extension, a promise they have not been confident to make up until now.

The announcement also included a pledge to provide an new, updated code for landlords and tenants, to supplement an earlier one published in the summer, and revealed plans to review the current regime of commercial landlord and tenant legislation, which it described as “outdated”, in order to “address concerns that the current framework does not reflect the current economic conditions.”

Finally, the government reiterated its overarching advice to tenants:  If you are able to pay your rent, you should continue to do so.

Nothing said or done by landlords’ during the moratorium, short of a formal write-off of rent, will serve to waive their right to forfeit once the moratorium lifts, and tenants who have not been paying their rent will now need to make sure that they are completely up to date by 31 March next year – or face immediate eviction once the suspension lifts.

*The information set out in this article is correct at the date of publication (14 December, 2020). The effect of coronavirus on businesses is a fast-changing area and so it is important to obtain legal advice to ensure you are properly protected. Visit our Coronavirus (COVID-19) Hub for more Leading Insights.

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If you have any questions regarding the impact of the Coronavirus upon your business or are seeking up-to-date legal advice on property dispute matters, contact Laura Offer on 01202 294 566 or email LauraOffer@steeleraymond.co.uk. Alternatively, contact a member of our Commercial Property team in Bournemouth.

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