Yesterday, the government announced that it will be introducing new measures to protect the UK High Street from aggressive rent collection and closure during the Coronavirus pandemic.
The announcement (which you can find here) states that statutory demands and winding-up petitions issued to commercial tenants will be “temporarily voided” and changes will be made to the use of Commercial Rent Arrears Recovery (CRAR).
It goes on to say that under these measures, any winding-up petition that claims the tenant company is unable to pay its debts must first be reviewed by the court to determine why. The law will not permit petitions to be presented, or winding-up orders to be made, where the company’s inability to pay is as a result of the Coronavirus pandemic. Legislation will also be brought forward to prevent landlords using commercial CRAR unless 90 days or more of unpaid rent is owed.
It further states that the new legislation to protect tenants will be in force until 30 June, and can be extended in line with the moratorium on commercial lease forfeiture. Section 82 of the Coronavirus Act 2020 already introduced by the government includes a suspension of forfeiture rights, which prevents all commercial tenants from being removed from their properties until 30 June.
We must now await the detail of the proposed new Coronavirus measures and how this will tie in with the existing measures found in section 82. The announcement states that the new measures will apply to “high street shops and other companies” and it remains to be seen at this stage whether such measures will be extended to all commercial landlords and tenants. What “temporarily voided” means also remains to be seen.
However, it is clear that the government is continuing to introduce concessions to try and assist landlord and tenants to reach agreement in relation to payment of rent during the period in which these measures remain in force, in an effort to create certainty.