New temporary measures announced to assist commercial tenants affected by COVID-19

By Joss Hargrave, Jordan Cooper

04-2020

The Government has announced plans to introduce further temporary measures this time designed to protect commercial tenants from landlords attempting to collect unpaid rent through the use of statutory demands and winding up petitions. 

The Corporate Insolvency and Governance Bill will introduce a ban on the use of statutory demands made between 1 March 2020 and 30 June 2020 and winding up petitions presented from 27 April 2020 to 30 June 2020 where a company is unable to pay its debts due to the coronavirus. 

The measures will also prevent landlords from using commercial rent arrears recovery (CRAR) unless 90 days or more of unpaid rent is owed. 

The Government has announced that this will affect statutory demands and winding up petitions where a tenant is unable to pay its debts due to coronavirus. This suggests that any winding up petitions presented will have to be assessed by the Court to determine whether unpaid rent is due to the effect of the coronavirus on the tenant or otherwise. It remains to be seen how this will be done in practice.

These measures will be in force until at least 30 June 2020 and can be extended further. These new measures add to the measures introduced in the Coronavirus Act 2020 which prevents the enforcement of a right of re-entry or forfeiture by a landlord under certain commercial leases.