Extension on commercial rent arrears action needs careful handling – Thursfields

Jon Clifford, director in Thursfields’ commercial litigation team

Thursfields Solicitors is calling on the Government to balance the rights of commercial landlords with those of their tenants following the decision to extend the restrictions on pursuing tenants for rent arrears to the end of the year.

Jon Clifford, a director in Thursfields’ commercial litigation team, said: “Recent Government reaction to the Covid-19 pandemic has once again impacted a landlord’s ability to remove commercial tenants on account of rent arrears.

“The prohibition on the use of forfeiture has been extended and, currently, Commercial Rent Arrears Recovery (CRAR) cannot be exercised until at least 189 days’ worth of rent arrears has accumulated. All initiatives were due to expire on 30 September 2020.”

On 16 September 2020, the Government announced that the initiatives relating to forfeiture and CRAR will be extended until 31 December 2020.

Mr Clifford added; “No further update has been issued regarding the service of statutory demands to commence winding up proceedings however, given the increased emphasis on the protection of commercial tenants, it is likely that the stay on this remedy will also be extended to the New Year.

“The recent announcements are a clear response to the concerns voiced by commercial tenants, many of whom have suffered greatly under the pandemic restrictions and do work well to protect these parties.

“However, many landlords are left in a vulnerable position, as tenants are effectively empowered to decide the time of rent repayments; despite the cautionary tone of the Government for commercial tenants to pay rent wherever possible.”