The emergency Coronavirus Act 2020 was given Royal Assent on 25th March 2020, and is now enshrined in English law. Whilst a few sections simply provide the Government with powers to amend existing provisions of relevant legislation, section 82 of the Act has provided clarity on the protection from eviction for commercial Tenants.
Evictions paused for three months
For the period 25th March 2020 to 30th June 2020, no commercial Tenant may be evicted for non-payment of rent. This means that Landlords will be unable to enforce the provisions in their Leases relating to forfeiture and re-entry until late summer. It is confirmed however that Landlords are not waiving their right to collect rent during this period, if it is not paid and they take no action, unless they specifically express such a waiver in writing.
The legislation also provides that any period of non-payment of rent between 25th March and 30th June 2020 cannot be used as evidence of persistent non-payment in any subsequent possession proceedings. Any period of non-payment prior to the Coronavirus legislation may still be used as evidence of persistent non-payment.
What does this mean for landlords?
Within the new legislation, the provision for non-payment of rent includes all sums which a Tenant may be obliged to pay under the terms of their Lease. This arguably therefore includes the non-payment of insurance rent, service charges and rates contributions.
If there are current proceedings in either the County or High Courts for possession of a property, and if the Court order in favour of a Landlord, the Tenant will not be obliged to yield up possession of the property until after 30th June 2020. This could cause cashflow issues for the Landlord, as it is unlikely a Tenant would pay any rent during this period.
Lastly, if you are a Landlord and are in receipt of a possession order from the High Court, you will now not be able to enforce this until after 30th June 2020.
Commercial Property advice from Backhouse Solicitors
If you are a Landlord having trouble with your tenants not paying rent, or if you are a Tenant and are struggling to make this month’s payment and are fearful of the action your Landlord may take, contact us today to discuss your options with our expert commercial property law team.
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