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Emergency Coronavirus Legislation: the effect on business tenancies

Parliament is in the process of enacting emergency legislation to pass sweeping powers to deal with the coronavirus pandemic. The Bill completed all its stages through the House of Commons yesterday without opposition. It will now proceed through the House of Lords where further amendments could be made. The Bill has two key provisions for business tenancies and premises.

The first is an amendment introduced at Committee Stage, which will prevent a landlord from forfeiting a tenancy for non-payment of rent by either peaceable re-entry or court proceedings. The moratorium on forfeiture only applies to non-payment of rent and not to any other breach of covenant which may give the landlord the right to forfeit. "Rent" includes any sum which a tenant is liable for under the tenancy, meaning it will include service charge and insurance rent in addition to principal rent. The restriction will apply from the date after the Bill becomes law, ending on 30 June 2020 or later, if extended. During this period, no conduct on behalf of the landlord (including the landlord's agent) shall waive its right to forfeit unless an express waiver is given in writing.

The second amendment is the power to close premises or to impose restrictions on the persons entering or remaining inside them. This provision will allow the Secretary of State to issue a direction imposing prohibitions, requirements or restrictions in relation to specified premises or premises of a specified description. Following the Prime Minister's address to the nation yesterday, Government advice is for all "non-essential" businesses to close their premises, although it is not mandatory. The legislation will provide powers to enforce closures or restrictions on premises, with criminal offences imposed on those who fail to comply with the Secretary of State's direction. A person guilty of an offence will be liable to a fine, as will the officer of an offending company.

The Government is taking more decisive steps to deal with the public health emergency, but it remains to be seen whether this action will be enough. It is important to note that the Bill has not yet received Royal Assent and will not become law until it has. 

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dispute resolution, robert mullarkey, coronavirus, business tenancies, landlords, landlord and tenant, commercial real estate