Woodfines Solicitors
11th September 2020Section 82 of the Coronavirus Act contains provisions protecting business tenants from lease forfeiture due to the non-payment of rent. During the ‘relevant period’ (originally due to expire on 30 June, but since extended to 30 September), commercial landlords are unable to forfeit their tenant’s lease unless they give an express waiver in writing. Similarly, the use of Commercial Rent Arrears Recovery (CRAR) is restricted to cases where landlords are owed over 189 days’ unpaid rent (also until 30 September 2020).
Furthermore, under the recently passed Corporate Insolvency and Governance Act (CIGA), creditors are also restricted from serving statutory demands or winding up petitions until 30 September 2020.
The impact on commercial landlords
The aim of this legislation was to prevent the mass eviction of commercial tenants experiencing cash flow problems as a result of the crisis. But with so much focus on commercial tenants, have we forgotten about the impact on their landlords?
A survey published by the Scottish Property Federation found that over half the commercial landlords surveyed had been left with “serious or terminal” problems as a result of rent arrears(1) . Meanwhile, research from Remit Consulting revealed that just 63.3% of rents and 64% of service charge payments had been collected from commercial tenants a full 35 days after Q2’s rent collection deadline in June(2).
What are my options?
While it is undeniable that commercial landlords’ options are severely curtailed at present, certain avenues remain open to them.
Expert lawyers
Whether you are a landlord experiencing difficulties due to non-payment of rent, or a tenant seeking to come to a temporary agreement with their landlord, our specialist team of lawyers is at hand. We can help facilitate open and honest negotiations, allowing both parties come to a mutually beneficial agreement. To find out more, contact our Dispute Resolution team at LitigationDept@woodfines.co.uk.
(1) https://wwderation.org.uk/media-listing/press-releases/spf-commercial-property-owner-survey-sheds-light-covid-19-experiencesw.scottishpropertyfe
(2) https://www.remitconsulting.com/blog
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