The government has announced an extension to the moratorium on forfeiture of commercial leases for non-payment of rent. The moratorium which was due to expire on 30 March 2021 has now be extended to 30 June 2021.
The moratorium is governed by the Coronavirus Act 2020, which came into force on 26 March 2020. Section 82 of the Coronavirus Act 2020 restricts a landlord's ability to forfeit a commercial lease, during the relevant period, for non-payment of rent.
The news will be met with a sigh of relief from commercial tenants, who were disappointed the issue of 'rent' had not been included in the recent Budget. However, the indication that the government is proposing to support landlords and tenants to try to agree their own ways of paying or writing off rent debts, seems to suggest that this could be the last extension to the moratorium.
From experience, over the past year, landlords and tenants have already been working together to try to agree rent concessions in order to survive the pressures (which each have equally been faced with) as a result of the pandemic.
It is difficult to foresee what type of support might be available because the issue of debt is a contractual matter between the parties. The fear is once the moratorium is lifted - depending on the recovery of the market - some landlords may have no option but to seek forfeiture action, due to the escalating debt crisis.
Housing Secretary Robert Jenrick confirmed that the protections, which prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the Coronavirus pandemic, will now expire at the end of June. The moratorium had been scheduled to end on 31 March. In a statement, Jenrick said: "It is right that as we move through the roadmap, we ensure that businesses and renters continue to be supported.