What’s Changed and What Are my Rights as a Landlord or Tenant of Commercial Property in England?

April 5, 2022

 

By Siôn Fôn

The general moratorium on forfeiture of commercial leases, which was introduced by the Government to protect tenants of business premises during the Covid-19 pandemic, came to an end on 25 March 2022 in England.

The general moratorium has been replaced by the Commercial Rent (Coronavirus) Act 2022 (“the Act”), which is intended to promote the amicable resolution of disputes between landlords and tenants regarding lockdown related arrears.

Key features of the Act include:

  • Landlords of commercial premises in England are once again capable of forfeiting the lease, provided their tenant’s arrears (including rent, service charge, insurance arrears and interest) are not ‘protected rent debts’ (“PRDs”).

    For arrears to qualify as PRDs, the tenant’s business must have been (a) subject to a legally enforceable closure between 21 March 2020 and 18 July 2021 (in England) or 7 August 2021 (in Wales); and (b) the arrears must have accrued within the ‘protected period’, which is from 21 March 2020 to the last day on which the tenant was subject to an enforced closure or a specific Covid related restriction imposed by the Government.

    Under the Act, landlords remain unable to forfeit the lease if their tenant’s arrears qualify as PRDs. However, if arrears pre-date 21 March 2020 or post-date 18 July 2021 (in England) or 7 August 2021 (in Wales), or if the arrears were accrued by a business that wasn’t affected by a Government enforced lockdown (for example pharmacies, which were allowed to remain open), then forfeiture proceedings may once again be commenced by commercial landlords in England.

  • The creation of a new arbitration process to resolve disputes where the landlord and tenant have been unable to reach an agreement themselves on payment of arrears which accrued during the protected period. The arbitrator will consider the tenant’s accounting documentation and assess the viability of the tenant’s business to determine whether some or all of the debt should be written off or deferred to enable the tenant’s business to remain afloat.

    Arbitration under the Act must be commenced by 25 September 2022 by serving notice on the other party to the lease of the intention to refer the dispute to an arbitrator. The landlord will be unable to commence enforcement action to recover a PRD until 25 September 2022 or, if later, until arbitration is concluded.

    It is important to note, however, that the law differs between England and Wales with regards to forfeiture further to a recent Welsh Government announcement. An article discussing the differences in the law in Wales can be found here.

If you are a landlord or a tenant of commercial premises in England and require advice on your rights and obligations, please get in touch with Siôn Fôn now on 029 2082 9107 for an initial free, no obligation chat.

 

 

 

Contact Our Team
Catherine Burke
Partner
View Profile
Damian Phillips
Partner
View Profile
Fflur Jones
Managing Partner
View Profile
Gareth Wedge
Partner
View Profile
Mark Rostron
Partner
View Profile
Nick O’Sullivan
Partner
View Profile
Owen John
Partner
View Profile
Rhodri Lewis
Partner
View Profile
Stephen Thompson
Partner
View Profile

I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”

Becs Beslee, Dice FM Ltd

Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”

Rebecca Cooper, ACT Training

We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”

Karen Gale, Stepping Stones Group

An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”

Gwawr Booth, Portal Training Ltd

PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”

Ledia Shabani, Property Support Services UK Ltd

We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”

Guto Bebb, Farmers’ Union of Wales

Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”

Iwan Hywel, Mentrau Iaith Cymru

My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”

Margot Adams, Guarding UK Ltd