#CORONA COMMERCIAL TRIAL#

However, landlords must be aware of the controls and strict timescales on the use of this remedy imposed by the Landlord and Tenant (Covenants) Act 1995. Recovery from former tenants and guarantorsĪ landlord may be able to recover rent arrears and other sums due under the lease from former tenants and their guarantors. Remedies that remain available to landlords Under the act, it is not possible to present a winding up petition between 27 April 2020 and 31 March 2021, unless it can be shown that Covid-19 has not worsened the debtor's financial position or the debtor could not have paid its debts even if there had been no Covid-related worsening of its financial position. The Corporate Insolvency and Governance Act prohibits the presentation of a winding-up petition based on an unsatisfied statutory demand served between 1 March 2020 and 31 March 2021.

This restriction applies until 31 March 2021. The Taking Control of Goods and Certification of Enforcement Agents (Amendment) (Coronavirus) Regulations 2020 initially prevented landlords from using CRAR unless at least 90 days’ rent was due but has since been extended and will rise to 366 days' rent from 25 December. This suggests that there are likely to be delays in proceedings while the courts deal with the backlog of claims. The practice direction also states that the usual provision that the initial hearing in a possession claim should be within eight weeks of issue of the claim will not apply between 20 September 2020 and 28 March 2021. If no reactivation notice has been served by 29 January 2021, the claim will be automatically stayed. There is no standard form for a reactivation notice but it must be in writing and contain certain prescribed information.

#CORONA COMMERCIAL TRIAL#

If a landlord issued a claim before 3 August 2020, the landlord must serve a 'reactivation notice' for the claim to be listed or relisted – and no later than 42 days before any scheduled hearing date (if one exists), otherwise the trial will be vacated.

Practice Direction 55C (as amended) provides for the resumption of possession proceedings, now the stay has expired. Practice Direction 51Z initially stayed all possession proceedings from 27 March until 25 June 2020 (except claims against persons unknown), and was ultimately extended until 30 September 2020. The MHCLG is monitoring enforcement of non-payment closely and keeping the issue under review. Landlord's other remedies – section 82 does not currently impact upon the other remedies which remain available to a landlord to recover unpaid rents ( see below). MHCLG has indicated that whether forfeiture by consent is caught by the moratorium will depend on the facts of a given case. This means the forfeiture moratorium will cover all commercial leases, whatever their length of term and irrespective of whether they enjoy security of tenure protection under the Landlord and Tenant Act 1954, where someone is in occupation of the premises for the purposes of their business.Ĭonsensual forfeiture – section 82 of the act appears to prohibit consensual forfeiture. As such, the forfeiture moratorium will apply to service charge and all other outgoings under a lease.īusiness tenancy – section 82 of the act is intended to cover 'all commercial leases with someone in occupation of the premises for the purposes of their business.' Rent – for the purposes of the forfeiture moratorium, rent includes 'any sum' a tenant is liable to pay under a business tenancy. The Ministry of Housing, Communities and Local Government (MHCLG) clarified a number of unanswered questions arising from the Coronavirus Act 2020, addressing the following key points: The amended Section 82 Coronavirus Act 2020 currently prevents any forfeiture between 26 March 2020 and 31 March 2021, whether by proceedings or peaceable re-entry, of the vast majority of commercial leases for non-payment of “any sum” due under the lease.Ĭontrary to some misunderstandings, those sums remain due by tenants and only an express waiver will waive the right to forfeit when the restricted period ends. The Coronavirus Act 2020 – forfeiture of commercial leases Commercial landlords and tenants will find themselves in a variety of circumstances due to the effects of Covid-19, the nature of which will determine what options remain to landlords to recover rent from tenants, former tenants, subtenants and guarantors.

Corona commercial