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19 Jun 2020

Further restrictions on pursuing rent arrears

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The Government has today announced that it will extend protection to tenants:

  • The restriction on forfeiture for non-payment of rent and other financial obligations is extended until 30th September 2020;
  • The ban on statutory demands and winding-up petitions for companies will also be extended until 30th September 2020;
  • The amount of rent which must be unpaid to serve a CRAR notice or seize goods under CRAR will increase from 90 to 189 days. The effect of this is that CRAR cannot be exercised even if a tenant has paid nothing for two quarters (as it would then still only owe 183 days' rent). The provision is also extended until 30th September 2020.

Landlords can however still start ordinary county court proceedings against tenants who don't pay their rent, obtain a CCJ and then enforce that judgment. Though slower, this is one of the very few rent collection methods still open to landlords. This is something we can help with. Forfeiture for non-financial breaches also remains possible.

The Government has also published a Code of Practice for commercial property relationships during the pandemic. The 11-page document can be viewed here. The code encourages tenants to continue to pay their rent in full if they are in a position to do so and advises that others should pay what they can. However the Government has left landlords with few options to ensure that such tenants do pay.

The press release is available here.

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