Extension to Restriction of Forfeiture for Commercial Properties

30 March 2021

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The protections for business tenants brought in by the Coronavirus Act 2020 have been extended once again, now expiring on 30th June 2021.

This brings the prohibition on rent-based forfeitures for commercial landlords over the one year mark, adding pressure to a stretched industry. Many landlords have recovered only a small percentage of the rent due over the last twelve months, as premises remain closed and tenants continue to struggle.

It is difficult to see this protection lifted until shops can re-open and have a short period of uninterrupted trade. The level of government support may dictate whether we see a spike in forfeitures.

Landlords have been reluctant to issue proceedings for a judgment for overdue rent. However, once restrictions are lifted we may see a shift in attitude. Landlords and tenants alike will have an eye on the Lillywhites decision due in England, where Mike Ashley’s Fraser Group have opposed an application for summary judgment for overdue rent accruing during the pandemic. They argue that rent should only be due when a store can be used for its intended purposes.

If you would like any further information or advice, please contact Darren Toombs or Shane McVeigh at Carson McDowell.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.

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