The government has today (9 December 2020) announced that it will extend the moratoria on forfeiture, insolvency proceedings and on landlords using Commercial Rent Arrears Recovery (CRAR). These measures were introduced in the wake of the COVID-19 pandemic to assist struggling business.
In March, the government passed legislation to restrict the landlord's ability to forfeit a business tenancy for non-payment of rent. The Coronavirus Act 2020 was hastily pushed through parliament to prevent landlords from forfeiting by either peaceable re-entry or the service of court proceedings. In April, the government announced that it would introduce measures into the Corporate Insolvency and Governance Act to prevent a petition being presented or a winding up order being made where a tenant's inability to pay the rent is due to the impact of COVID-19. The government also introduced legislation to restrict a landlord's ability to recover arrears through the CRAR procedure. The initial moratoria were introduced for a period of 3 months to 30 June but have subsequently been extended twice and were due to expire on 31 December 2020.
However, given the country has recently emerged from a second national lockdown, and with many parts of the country experiencing tier 2 and 3 restrictions, it was widely expected that the government would extend the moratorium into the New Year. The government has done just that, and the moratoria will continue until 31 March 2021. As echoed in the Code of Practice for commercial property relationships during the COVID-19 pandemic the government maintains that those tenants who can pay any or all of their rent should continue to do so.
The government has made it clear that this will be the final extension which gives landlords and tenants 3 months to reach agreements on rent arrears which ties in with the government's hope that life will start to return to some sense of normality from the Spring with the roll-out of mass vaccinations. This paves the way for landlords to take more aggressive action in relation to unpaid rent arrears from April 2021.
The government has made it clear that this will be the final extension which gives landlords and tenants 3 months to reach agreements on rent arrears