More bad news for commercial landlords

Elizabeth Shaw Elizabeth Shaw 08 July 2021

The Government recently announced further restrictions preventing eviction of commercial tenants for non-payment of rent.

Wake Smith’s property litigation solicitor Elizabeth Shaw looks at the implications for commercial landlords.

Forfeiture/Right of Re-Entry

The temporary suspension of landlords rights to forfeit business leases for non-payment of rent have been extended until 25 March 2022 for all businesses. 

However, the Government has made it clear that tenants are encouraged to pay rent in accordance with their lease or any agreed concessionary arrangements.

This does not impact on the landlord’s rights to take enforcement action for breaches of covenants other than non-payment of rent.

Commercial Rent Arrears Recovery (CRAR)

The limitations on CRAR will also remain in place until 25 March 2022. A landlord cannot utilise CRAR unless there are at least 544 days outstanding rent.

Statutory Demands and Winding Up Petitions

The current restrictions which were due to expire on 30 June 2021 will now continue for a further three months until the end of September 2021. The only exception is if the landlord can prove that the company would have been insolvent even without the Pandemic.

New Provisions

Whilst the detail is awaited, there is also to be a ring-fencing of arrears built up by businesses affected by Pandemic trading restrictions. Landlords are expected to share the pain. If landlords and tenants cannot agree there is to be a new mandatory and binding arbitration procedure.

It is not clear how this will work if the leases never contemplated arbitration as a method of dispute resolution.  It is therefore not clear how the statutory imposition of arbitration will interfere with the contractual bargain that the parties entered into.

Clearly these new provisions will provide breathing space for tenants.

It is also not clear how this ring-fencing will work i.e. will it cover all rent since March 2020 or just specific periods of mandatory closure. What about those business that have been able to partially trade for example take-away services as opposed to eat in?

Court proceedings

For the time being at least, there is no change to the landlord’s right to threaten and pursue County Court or High Court proceedings to recover the debt. More recently the Courts have found favour with the Landlords and have awarded summary judgment on arrears claims.

That said, we will expect the new legislation to include provisions to prevent landlords from circumventing any new ring-fencing/arbitration rules. Landlords therefore may wish to consider whether it is worth the cost of starting new claims now for pandemic arrears.

For advice on landlords matters contact Elizabeth Shaw at Wake Smith Solicitors on 0114 266 6660 or at [email protected] 



June 20221May 20227April 20223March 20223February 20223January 20224December 20214November 20213October 20215September 20216August 20212July 202111June 20218May 20216April 20212March 20219February 20218January 20219December 20208November 202013October 20209September 20208August 20203July 20208June 202016May 202013April 20209March 202016February 20209January 202011December 20199November 20199October 201911September 20197August 20194July 20196May 20198April 20196March 20193February 20195January 20194December 20186November 20185October 20182September 20185August 20184July 20189June 20184May 201810April 20185March 20184February 20184January 20183December 20175November 20178October 20177September 20179August 20175July 20176June 201710May 20176April 20178March 201711February 20177January 201713December 20169November 20167October 201610September 201610August 20166July 20167June 20163May 20162April 20166March 20162February 20164January 20165December 20153November 20155October 20156September 20156August 20157July 20157June 20157May 20156April 20159March 20156February 201510January 20156December 20145November 20144October 20142September 20143May 20144March 20146February 20144January 20142December 20132November 20133September 20134July 20132June 20132May 20133April 20131March 20133February 20133January 20136December 20121November 20123October 20122August 20122July 20128June 20123April 20123March 20121January 20124December 20112November 20111October 20112September 20113August 20113July 20117June 20119May 20117April 20115March 20119February 20118January 20111December 20101October 20102September 20102August 20103July 20106June 20101May 20102April 20106March 20102February 20103January 20102December 20095November 20092October 20092September 20092August 20091July 20095June 20095May 20093April 20093March 20093February 20091January 20092November 20082October 20082September 20081August 20083July 20081January 20082

Featured Articles

Contact us