Update: The Stay On Business Tenancy Terminations Continues

• Published date: 25 September 2020
• Subject Matter: Real Estate and Construction, Coronavirus (COVID-19), Landlord & Tenant - Leases, Government Measures
• Law Firm: Charles Russell Speechlys LLP
• Author: Ms Emma Humphreys and Laura Bushaway

The Coronavirus Act 2020 ("the Act") came into force on 25 March 2020. For landlords and tenants in England and Wales, the Act immediately prevented a landlord from terminating certain business tenancies by forfeiture for non-payment of rent until 30 June 2020. This date was then extended to 30 September 2020.

The Government has now announced that the moratorium on the forfeiture of business tenancies will be further extended until 31 December 2020. Powers remain available in the Act for further extensions of this date.

The new extension is contained within The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 2) Regulations 2020 ("the Regulations") which will come into force on 29 September 2020.

The restrictions apply to forfeiture by the landlord instructing a bailiff to change the locks as well as to forfeiture proceedings in the Court.

What tenancies do the restrictions apply to?

The Act states that the restrictions benefit any business tenancy to which Part 2 of the Landlord and Tenant Act 1954 ("the 1954 Act") applies. The Explanatory Notes accompanying the Act confirm that the Government intended it to also apply to leases where the protection of the 1954 Act is excluded. The provisions also seek to cover lawful subtenants.

Does it apply to rent or other payments under the lease including service charge and insurance?

Yes, the definition of rent extends to any sum payable under the business tenancy including insurance, service charges and interest.

If the landlord enters into discussions with a commercial tenant in relation to the sums owed, could it lose the right to forfeit for non-payment of these sums?

No - The Act states that the landlord's conduct during the relevant period (25 March 2020 to 31 December 2020) will not be treated as waiving the right to forfeit for non-payment of rent...