Commercial tenants protected from eviction until the end of 2020

In its press release on 16 September 2020, the government has confirmed the extension of its support to businesses by continuing the suspension of action to forfeit commercial leases and evict commercial tenants to the end of this year.

The government’s support is aimed at businesses that have been hardest hit by Covid-19 and where businesses can pay rent that is due, the expectation is that they should. 

The Secretary of State for Housing and Communities, Rt Hon Robert Jenrick said he was “extending support to protect those businesses that are unable to pay their rent from eviction to the end of the year. This will stop businesses going under and protect jobs over the coming months”.

This will obviously come as welcome relief for commercial tenants seeking to remain in their premises with a view fulfilling the government’s vision of trading over the coming months and into the Christmas period. 

Whilst the government’s intention to protect businesses struggling during these unprecedented times might extend a crucial lifeline for many tenants, some landlords may be scratching their heads wondering how their own commercial property business is being protected, especially those with financial commitments to third parties, such as lenders and, for those that have them, their own employees.

The Secretary State for Business and Energy, Alok Sharma, said, “During this particularly challenging time for businesses, it is crucial that both landlords and tenants have the clarity and reassurance they need to build back better from the pandemic”.  The government’s guidance is that landlords and tenants should continue to work together to agree rent payment options if businesses are struggling due to Covid-19.  With this in mind, the government published a Code of Practice in June 2020 to assist landlords and tenants in achieving this. 

In the meantime, commercial tenants, in the main, will continue to be liable for covenants and all other payment obligations under their leases, such as rent, insurance premiums, interest and costs. A further challenge for landlords and tenants will be how to manage their ever increasing liabilities, with landlords possibly having to consider alternative courses of action if satisfactory agreements are not reached.

If you are a commercial landlord or tenant and require assistance please contact Harris Charalambous, Partner and Head of Commercial and Property Dispute Resolution, on 020 8567 3477 or by email at harris.charalambous@prince-evans.co.uk