The Government has introduced a moratorium on the use of any right of re-entry or forfeiture for non-payment of rent by action or otherwise in the case of commercial leases from 26 March until 30 June 2020 (“relevant period”). The new law is contained in Section 82 of the Coronavirus Act 2020 (“2020 Act”) which can be found at https://www.legislation.gov.uk/ukpga/2020/7/section/82/enacted
In addition to Section 82 of 2020 Act the Civil Procedure Rules (“CPR”) have been changed (“PD51Z”) to decree that all proceedings for possession brought under CPR Part 55 and all proceedings seeking to enforce an order for possession by a warrant or writ of possession are stayed until 25 June 2020. Existing possession proceedings are automatically stayed until 25 June 2020, without the need for a court order. If you try to commence new possession proceedings they will probably be stayed on issue until 25 June 2020. You wont be able to enforce an existing possession order by execution of a writ or warrant until 25 June 2020. The Section 82 moratorium only applies to “relevant business tenancies”, which means a business tenancy under Part 2 of the Landlord and Tenant Act 1954 (“1954 Act”).
It should be noted that the moratorium will apply to any short lease which contains a right to renew beyond six months or if the combined duration of any prior occupation by the tenant and the lease term exceeds 12 months. The moratorium ends on 30 June 2020 unless it is extended by Statutory Instrument. The moratorium does not change your tenant’s legal obligation to pay you rent due under your lease or tenancy. It should be noted that for the purpose of the moratorium “rent” means any “rent arrears”. It includes any sum which the tenant is liable to pay under a relevant business tenancy, such as service charges, insurance rent and any other payments due. This means that during the “relevant period” in the case of a “relevant business tenancy”:-
- you cannot forfeit a lease for non-payment of rent by changing the locks nor can you start a claim in court seeking forfeiture of the lease for non-payment of rent
- if you have an existing order for possession which has not been executed before 26 March 2020 you cannot enforce it until after 30 June 2020
- if you started forfeiture proceedings before 26 March 2020 and they come before the court in the “relevant period” the court must ensure that a tenant is not required to give possession before the end of the “relevant period”
- if a tenant applies to vary a possession order which was made prior to or during the relevant period the court must ensure that the tenant does not have to give possession of the property before the end of the relevant period
- if at a later date the court is deciding whether to refuse a new lease under the 1954 Act on the ground of “persistent delay in paying rent which has become due”, it must disregard any failure to pay rent during the relevant period and
- nothing you do as a landlord will be regarded as “waiving” your right to forfeit or re-enter for non-payment of rent.