Commercial Property Considerations during COVID-19

6 July 2020
Uncategorised,

By John Arnold, Partner and Head of Commercial Law

Landlords and tenants will be aware that the Government intervened in the field of commercial property in March to try to protect tenants whose income had been completely lost or reduced as a result of the restrictions imposed by the UK’s lockdown.

One of the steps was to prevent forfeiture of commercial leases for failure to pay any sums due under the lease.

On 30 June, the Government increased these tenant protections by extending the time preventing forfeiture to the 30 September 2020.

All possession proceedings were stayed from March until 25 June and this period has now been extended by the Government until 23 August 2020. This however, does not include possession proceedings against persons unknown. In other words, claims against squatters or other illegal occupiers can still be pursued.

Landlords were prevented from using CRAR (the process of Commercial Rent Arrears Recovery) unless an amount of at least 90 days rent was due. Again, from 24 June, this has been increased to at least 189 days rent. This restriction also now applies until 30 September 2020.

There are clearly issues which are being stored up for a later date, and where they can, landlords and tenants should do all they can to reach an accommodation with each other’s commercial interests and realities. The Government’s Code of Practice for Commercial Property relationships published on 20 June is designed to assist in this respect. It is a voluntary code but widely endorsed in the property industry and it aims to foster collaborative actions for the benefit of both landlords and tenants.

If you would like any support or advice regarding a commercial landlord or tenant related issue, please contact us on 01244 356 789 or email info@cullimoredutton.co.uk to arrange a free half hour consultation with a member of our Commercial Law team.

Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.
 

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