Targeted Protection for Tenants and Potential Angst for Landlords

04 October 2021


On Thursday 9 September 2021, the Insolvency Service announced that the temporary insolvency restrictions protections are being lifted and new targeted measures to support small business and commercial tenants introduced.

Legislation has been passed at Westminster, namely the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021 (‘Regulations’).

The Regulations substitute the current Schedule 10 contained in the Corporate Insolvency and Governance Act 2020, which applies to England, Wales and Scotland. The new schedule / temporary measures will restrict winding up petitions from 1 October 2021 to 31 March 2022.

The Legal Position in Northern Ireland

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 11) Regulations (Northern Ireland) 2021 are mirror image legislation. These regulations substitute the current Schedule 11 contained in the Corporate Insolvency and Governance Act 2020, which applies to Northern Ireland. The new schedule / temporary measures will restrict winding up petitions from 1 October 2021 to 31 March 2022 in keeping with the England, Wales and Scotland Regulations.

Key points to note from introduction of this legislation:

1. A creditor may not present a Winding Up Petition for Winding Up of a company unable to pay its debt as defined in the Insolvency (NI) Order 1989 unless:

  • The outstanding debt is in excess of £10,000.00.
  • They have sought repayment proposals from the debtor company in writing and have given 21 days for the debtor company to respond. If serving a statutory demand it would thus be for a creditor to separately seek repayment proposals at this same stage formally in writing.
  • The debt is outside the definition of an “excluded debt”. An “excluded debt” means a debt in respect of rent or any sum or other payment that a tenant is liable to pay under a relevant business tenancy and which is unpaid by reason of a financial effect of coronavirus. It would appear that an “excluded debt” will include such things as service charge, insurance and services recharge.

2. It would appear that excluded debts falling outside of March 2020 through March 2022 may still be difficult to demand or petition for, by way of statutory demand or petition, if the tenant can prove that they are still unpaid by reason of coronavirus.

3. Outside of “excluded debts”, the Regulations do not make it clear whether the court is expected to take its own independent view as to whether the creditor has unreasonably rejected an offer by the debtor company as to repayment terms. Although the making of a winding up order is ultimately discretionary, to date that discretion has been very narrowly exercised. If the debt is due and unpaid, and insolvency is demonstrated by one of the normal statutory routes, the starting point and usually the finishing point before now has been that the petitioner is entitled a winding up order as a matter of right.


Whilst tenants will no doubt welcome this targeted protection, landlords will continue to feel that they have been left holding the short end of the stick. Many landlords are already pointing out that Governmental support has, in the main, been directed to tenants, with the hope that in turn they would use a portion of the support to make payment to landlords.

Landlords and their agents have been making the point, that in many cases they have received no support from Government and have received no payments from their tenants in 18 months, even though they have had ongoing liabilities to meet, such as managing agents fees, maintenance to buildings and having building insurance premiums to pay.

What is clear is that there is a very tricky balance to strike between adequately protecting tenants in businesses otherwise viable outside of the coronavirus pandemic and continuing to act as a crutch to failed businesses and preventing landlords from perhaps finding a more viable tenant for their property, in the present market.

There is a palpable sense of frustration by landlords who see the intervention preventing them for enforcing their otherwise legal contractual rights. Similarly there are businesses frustrated at not being able to fully open to trade and allow themselves to be in a position to pay all of their liabilities to their landlord.

The legislature in Northern Ireland as well as in the rest of the UK clearly want landlords and tenants to work together and try to find a workable solution to a difficult situation for both parties.

Over the past 18 months we have been involved in numerous situations for landlords and for tenants. In the vast majority of cases we have been able to find common ground and a workable solution. Landlords must face up to the need to have a viable tenant in their property when we come out the other side of the pandemic but similarly tenants must realise that this current protection will not last indefinitely.

If you would like further Debt or Insolvency advice, arising from arrears difficulties, please do not hesitate to get in touch with Darren Toombs.

*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.