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Coronavirus Act 2020 – Implications for business tenancies

Hewitts > All News > Coronavirus Act 2020 – Implications for business tenancies

The Coronavirus Act 2020 (the Act) Section 82 provides that a landlord of a business tenancy cannot exercise their right to re-enter or forfeit the lease for non-payment of rent until after 30 June 2020, although this date might be extended. Equally, no conduct on the landlord’s part during the relevant period will amount to waiver of its right to forfeit for non-payment of rent, other than by an express written waiver.

The Act prevents forfeiture based on non-payment only and does not prevent a landlord seeking possession where the tenant has breached the lease in some other way i.e. failed to maintain and repair, subletting in contravention of the lease etc.

Under the Act “rent” includes any sums payable under the tenancy such as service charge and insurance etc. The sums due do not have to be directly related to the current pandemic and as such, arrears accrued before the introduction of the Act are also protected from possession proceedings until the end of June 2020. The Act does not stop these sums accruing but simply, prevents the landlord taking possession during this period.

If a landlord has already commenced possession proceedings via court for non-payment of rent, the court will not grant possession until after 30 June 2020.

Landlords and tenants should make sure that any arrangements with regards to rent arrears accrued during this time i.e. agreement to pay by instalments, deferred payments etc. do not affect the original terms of the business tenancy, are for a specified period of time and are conditional upon further statutory change. Any agreements reached should be documented formally to avoid uncertainty and potential disputes in the future.

If you require advice regarding the recent changes to the law and how they impact upon your business tenancy, please contact our Litigation Team on 01388 604691.

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