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09 Dec 2020

Moratorium on forfeiture for non-payment of rent and winding-up petitions extended until 31 March 2021

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The Government has today announced that it will extend, yet again, until 31 March 2021 the moratoria on:

  • forfeiture on grounds of non-payment of rent or other sums due; and
  • presenting winding-up petitions

Restrictions on CRAR are already in place until 31 March 2021 (from Christmas Day 2020 rent equivalent to at least 366 days' rent must be due before CRAR can be exercised or before subtenants can be required to pay their rent directly to their superior landlord).

The government's announcement refers to the forfeiture moratorium extension as a "final extension".

We are however having some success in recovering unpaid rent from tenants who can pay, but who choose not to engage:

  • We have threatened to obtain, and obtained, county court judgments against non-paying tenants, resulting in payment.
  • We have also recently successfully recovered a substantial amount of rent from one large tenant by forfeiting its lease for non-financial breaches. Our landlord client only agreed to the tenant getting relief from forfeiture once it had paid over all the rent and other sums it owed.

Pressure can therefore still be applied against tenants who can pay their rent but exploit the current restrictions to avoid having to do so. 

Landlords should also preserve their right to recover rent from former tenants and their guarantors by serving s17 notices (NB such notices must be served within 6 months of the arrears falling due).

In addition the Government has also announced what it describes as "a review of the outdated commercial landlord and tenant legislation, to address concerns that the current framework does not reflect the current economic conditions". We will have to see what that means in practice.

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