In the vast majority of commercial leases, there is an ability for the landlord to forfeit the lease and take back possession of the premises should the tenant fail to pay its rent within a set period (usually 21 days) of the payment falling due.

 

However, in an effort to support businesses during this uncertain time, the Government has announced that commercial tenants who cannot pay their rent as a result of the coronavirus, will be protected from eviction for the next three months, thereby temporarily preventing landlords from exercising its ability to forfeit.

 

This forms part of the Coronavirus Act 2020 which was rushed through Parliament within the last few days.  It covers England, Wales and Northern Ireland, and will apply to all commercial tenants.  Whilst this measure will undoubtedly be welcomed by many commercial tenants, it should be noted that they will remain liable for the unpaid rent once the moratorium on forfeiture is lifted.

 

These measures will remain in force up to 30 June 2020, however there is an option for the Government to extend, if so required.

 

If you are a landlord or a tenant and require advice on the impact of these new measures, please contact Amanda Byrnes amanda.byrnes@tughans.com or a member of our Real Estate team who will be able to assist you.

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.