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Welcome news for commercial tenants but not for landlords

The moratorium on evictions for tenants who are behind on their rent has been extended until the end of 2020. The restriction was set to be lifted on 30th September 2020 but the secretary of state for housing, Robert Jenrick, announced an extension to give struggling retailers and other businesses a chance to “focus on rebuilding their business over the autumn and Christmas period”.

The June quarter day saw less than 20% rental payments made and with the next rent quarter day having just passed (29th September 2020) landlords will be bracing themselves for more of the same.

The Government continues to reiterate that landlords and tenants should work together and those tenants that can pay their rent should do so. But as the pandemic continues and the future remains uncertain business owners may be reluctant to commit any spare cash to rental payments.

The Government has also extended the restriction on landlords from using the Commercial Rent Arrears Recovery process to enforce unpaid rent until the end of the year.

These extensions may force landlords to consider their own financial viability and assess the future for their business. If you require advice on restructuring please get in touch.
Our Litigation team comments “The extension of the moratorium and the impact that this is having on landlords is very much a ‘hot topic’ at the moment and we are assisting clients across various sectors in navigating the difficulties it poses. If this is an issue which is impacting on you or your business, please do not hesitate to get in touch and we will be pleased to assist.”

Insolvency extension

On 24th September 2020 it was announced that further measures put in place to protect businesses from insolvency during the pandemic will be extended. The moratorium on issuing statutory demands and winding up petitions was due to expire on 30th September 2020 but this will now stay in place until 31st December 2020.

The suspension of liability for wrongful trading has not been extended beyond 30th September 2020. So, in theory if a business enters an insolvency process the directors can be liable if they continue to trade and the deficit to creditors deteriorates between now and the date of the insolvency process.

If you require advice on items raised in this article please get in touch.