Government extends current measures to further protect commercial tenants

The government announced late last week, that yet further measures are to be introduced in an effort to protect commercial tenants. The government plans to build on the measures already introduced in the Coronavirus Act 2020 (i.e. the suspension of the right of re-entry and forfeiture between 26 March 2020 and 30 June 2020) by introducing a temporary ban on the use of statutory demands and winding up orders where a company cannot pay its bills as result of coronavirus. The measures will form part of the Corporate Insolvency and Governance Bill outlined earlier this month. Secondary legislation is also to be implemented to prevent landlords from using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.

Note to Landlords…

Whilst landlords, investors and high street businesses are being asked to act collaboratively, this is a big ask for some landlords and investors, who are also financially stretched at this time.

Tenants tread with caution…

Whilst the measures implemented might assist tenants in the short term, tenants remain liable for all sums falling due under their tenancy agreement during this moratorium. Unless the government supplements the measures already implemented, the risk is that the impact is simply being deferred until the moratorium comes to an end.