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Extension to deadline buys tenants more time, but the expert advice remains the same - act now

Written by: Andrew Merrell | Posted 22 September 2020 7:05

Extension to deadline buys tenants more time, but the expert advice remains the same - act now

Pressure to do something, anything, to help tenants and businesses facing the September 30 deadline set by Government to protect them from pending rent arrears and potential closures eventually told. 

One of the key protections for commercial tenants, put in place on June 26 in the form of the Corporate Insolvency and Governance Act 2020, was due to come to an end on September 30. 

It was one of a number of measures aimed at giving businesses the breathing space and tools to maximise their chance of survival throughout and beyond the pandemic and impacted directly on owners and occupiers of commercial property. 

But from the start of this month the clamour for further extension became louder and louder and the Government has eventually stepped in and put everyone out of their misery – albeit only temporarily. That is save the landlords, who have not been receiving the agreed rent and now won’t for a while yet. 

Quite what it will do to everyone’s Christmas is another thing, but meanwhile those who have been helping both sides with such issues are sticking to their guns with regards to dealing with the issues.

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“The end date for such measures has now been extended from 30 September to 31 December 2020. The minimum unpaid rent under the commercial rent arrears recovery procedure has been further increased to 276 days to 24 December and then 366 days from 25 December,” said Emma Thompson, of solicitors Willans LLP. 

Her advice remains the same as before the change to the deadline. 

“Rather than kick matters into the long grass, it is wise for landlords and tenants to consider how the situation might be managed to achieve a satisfactory outcome for everyone.” 

She added: “In short, the measures meant a suspension of a landlord’s ability to issue forfeiture proceedings based on non-payment of rent and an increase of the minimum net unpaid rent that must be outstanding before the commercial rent arrears recovery procedure can be utilised.” 

The Act also contained further provisions preventing winding-up petitions being presented on or after April 27 this year where they rely on statutory demands served from March 1 to the end of December.

It is important to remember that they are only a temporary measure and that the obligation to pay any arrears will remain when they end,” said Ms Thompson. 

To read a fuller explanation of the provisions made available by Government, what they mean for commercial tenants and landlord, and what steps you could take, click here: COVID-19: a commercial property update for landlords & tenants.

To find out more read the full commercial property update from Emma Thompson here.