The commercial property team at LFBB have been watching and waiting intently for the latest developments in landlord and tenant law, an area that finds itself at the frontline of Coronavirus related seismic activity in the legal landscape.
It was announced this week that restrictions imposed on landlords to prevent forfeiture of commercial tenancies are to be extended from the initial cut off of 30 June 2021 up to 25 March 2022. Other Covid related measures that are extended include restrictions on landlords pursuing commercial rent arrears recovery (CRAR) also up to 25 March 2020 and the ability to serve statutory demands as a precursor to winding up petitions for a further 3 months.
The government has issued non-binding guidance to landlords and tenants that is supposed to encourage them to reach agreement wherever possible in order to avoid costly court action or insolvency. Anecdotally, we hear that very few landlords and tenants are taking up the code – although we do see some reaching agreement – and it is yet to be seen what will happen when the restrictions finally end. Will there be a wave of forfeitures leaving properties empty across the land, paving the way for a new age of business tenants?
In the meantime, we act for numerous landlords who are very frustrated by some tenants who they feel are playing the system. Of course, these restrictions are necessary to assist those businesses that have truly been affected by Covid19. However, the often-portrayed image of nasty corporate landlords is, in our experience, quite far of the mark. Landlords have been hit just as hard as tenants by the Covid19 pandemic.
There are other measures available to landlords to recover unpaid arrears. The most straight forward approach at the moment is to file a debt claim in the County Court, which in some cases may be followed by an application for summary judgement if the defendant has no real prospect of defending the claim. That process can take many months and cost many thousands of pounds, which is why prior to covid19 the debt claim was a rarely utilised option for enforcing arrears.
If you are a landlord or tenant and you are having difficulty paying or receiving rent, please do not hesitate to contact our commercial property team at LFBB on 0114 272971. We can help you to address an issue with your landlord or tenant before it is too late.