Moratorium on Commercial Lease Evictions Extended to the end of 2020

The government has announced it has now extended the rules on preventing commercial evictions and the use of CRAR until the end of 2020.

Currently, landlords are prohibited from seeking to recover possession or use the Commercial Rent Arrears Recovery (CRAR) for unpaid rent, unless 189 days of arrears are owed.  This was due to end on 30 September 2020 but the announcement to extend this date comes following Wales' confirmation that it was to do the same.  In addition, the amount of Arrears required before CRAR can take effect has also been amended.   Between 29th September and 24th December 2020, the equivalent of 276 days rent must be owed and from 25th December 2020, the amount of rent arrears required will rise to 366 days.

The move is an effort to protect businesses who are struggling the most during the pandemic to be able to stay in their premises and build on their business through the autumn and Christmas.  It is also hoped that this will assist in protecting jobs.  The guidance is such that where businesses can pay their rent they should do so, as the support is only a delay in the rents becoming payable, rather than a release of the liability to pay.  The same protection for landlords is provided in not waiving their right to forfeit by opening up discussions and negotiations with tenants to seek resolution with regards to unpaid rents.

It is worth noting that other methods of recovering arrears are not currently prohibited, such as drawing on the Rent Deposit Deed or other security, issuing a debt claim or seeking recovery from guarantors, but how quick and effective these measures will be in the coming months is not at all certain.

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