On 16 June 2021 the Government announced its intention to extend this moratorium by a further 9 months until 25 March 2022.
These measures form part of the emergency Coronavirus Act 2020 and for these purposes the relevant section is Section 82 of the Act. The Act is expressed to apply to a ‘relevant business tenancy’ and precludes the landlord from effecting a right of re-entry or forfeiture for the non-payment of “rent” for the “relevant period”. These terms are defined as follows:
Relevant Business Tenancy
- A tenancy to which Part 2 of the Landlord and Tenant Act 1954 applies, or
- A tenancy to which that Part of that Act would apply if any relevant occupier were the tenant.
Rent
“Rent” includes any sum a tenant is liable to pay under any relevant business tenancy.
Relevant Period
“Relevant period” means the period— (a) beginning with the day after the day on which this Act is passed, and (b) ending with 30 June 2020 or such later date as may be specified by the relevant national authority in regulations made by statutory instrument (and that power may be exercised on more than one occasion so as to further extend the period);
In the case of an applicable tenancy, the moratorium extends not only to the unpaid principal yearly rent but to any sums payable under the lease. In light of the Government’s recent measures, in these circumstances, the landlord would be precluded from effecting re-entry or forfeiture for any sums owed by the tenant until at least 25 March 2022.
The rent will continue to accrue together with interest and there is provision that no step taken by a landlord will waive the breach for non-payment of rent, save for an express waiver in writing. So in theory and in the absence of any further extension of the relevant period, the landlord’s entitlement to forfeit will be immediately restored at the end of the relevant period.
Does the moratorium apply to breaches of other tenant covenants?
The moratorium on commercial forfeiture does not apply to breaches of other tenant covenants and arguably will not extend to the requirement to pay unliquidated amounts such as damages for dilapidations.
In addition, under the Taking Control of Goods and Certification of Enforcement Agents (Amendment)(Coronavirus) Regulations 2020, the Government has restricted the use of Commercial Rent Arrears Recovery (“CRAR”). The amended statutory provisions in relation to CRAR are such that the use of CRAR will be restricted until 25 March 2022.
For advice on landlord or tenancy issues please contact Anna Duffy on 0151 230 1219 or email her on anna.duffy@dtmlegal.com
