COVID 19 – tenant protection measures extended


The restriction on the exercise of rights of re-entry or forfeiture by a landlord for non-payment of rent contained in s.82 of the Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No 2) Regulations 2020 (SI 2020/994) (“the Regulations”) has now been extended to expire on the 31 December 2020.

What does this mean for landlords and tenants?

This is welcome news for occupiers that are struggling to meet their financial obligations but it is now difficult to argue that the impact of the Regulations represents a fair balance between the interests of landlord and tenant. Whilst there is considerable variation across sectors and regions, some landlords facing increasing vacancy and non-payment by tenants are being forced into default of their own lending covenants. The remedies of secured lenders are of course unaffected by the Regulations.

The challenge for the government will be to return the commercial leasing market to normal without allowing aggressive landlords to irrevocably damage recovering businesses by taking back possession. But is that a real concern?

What to expect next

The general expectation is that Q3 results will show demand across sectors well below the 10 year averages and the comparable results of 12 months ago.  With that background, few landlords are eager to take back possession and bring space to market that will be difficult to re-let.

As mentioned in our previous update, where a viable business is in occupation it is often the tenant rather than the landlord with the stronger hand in rent concession discussions. With that in mind, is there not an argument for bringing the intervention in the market created by s.82 to an end as soon as possible?

Tim Allen


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