News & Insights

Moratorium on possession for commercial tenants

Mark Banham, Associate in the property litigation department considers the government’s decision to extend the moratorium on possession action to commercial tenants.

Welcome relief to commercial tenants comes in the form of the emergency Coronavirus Bill.

Last week the government announced the suspension of new evictions against social and private residential tenants with a moratorium of 3 months on new possession proceedings. Yesterday the government provided the long-awaited confirmation that the same moratorium will apply to commercial tenancies and that “Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction”.

This announcement has been made against the backdrop of landlords and tenants, particularly in the retail and leisure industry, already engaging in proactive discussions concerning rent holidays and concessions until such time as they are able to trade normally.

The measure has the effect of preventing a business from facing forfeiture if it misses a rent payment in the next three months. This announcement will come as welcome relief for commercial tenants seeking certainty, as the impending March quarter date approaches, that it will not be served with possession proceedings or have the locks changed at a time when it is impossible for them to trade.

The Government’s announcement makes reference to providing further assistance to commercial tenants after the period of three months taking account of the inevitable impact the coronavirus will have upon cash flow. A further announcement with specific details on what this assistance will look like is anticipated as the situation develops generally.

If you have concerns as to how this announcement or Coronavirus may impact your property interest do contact the Property Litigation team, where it is business as usual (albeit remotely).