The Government recently announced an extension to its scheme to protect commercial tenants who are unable pay their rent from eviction through the COVID-19 pandemic. Initially introduced in March, the scheme announced that three month holidays would be available to commercial renters, providing much needed protection to struggling retailers and leisure businesses in particular, who were forced to close their doors and stop trading as part of the Government’s strategy to control the virus.
Although this move offered helpful support for businesses, the Government was aware that commercial landlords would understandably be impacted. As a result, the Government made clear that any rental holidays issued would only act as a payment delay, and would not affect a landlord’s right to claim forfeiture or recover rent after the initial three-month period ended.
As this initial three-month period comes to an end, and the coronavirus pandemic still creates challenges for businesses, the Government has decided to offer tenants the opportunity to engage with a rental holiday for a further three months.
To support this, a Code of Practice has been introduced which has been designed to help commercial landlords and their tenants establish a plan for economic recovery. Landlords are encouraged to speak to tenants to understand their ability to pay rent over the next few months which will allow them to plan accordingly. In addition, it is important that landlords are being proactive, have some well thought out plans in place if tenants opt for a rental holiday, and seek advice and assistance as soon as possible using the various Government support measures available.
The new details of this scheme are as follows:
1) Suspension of forfeiture of evictions from 30 June 2020 to 30 September 2020, enabling tenants more time should they not be able to pay their rent within the next three months
2) Commercial Recovery of Rent Arrears cannot be used unless a landlord is owed 189 days of unpaid rent
If any commercial landlords would like to discuss their options where rent is owed or financial support is required, please get in touch with Jonathan Cunningham using the button below.
This information is correct as of 1 July 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.