The most commonly used remedy to recover rent is to forfeit the lease either by peaceable re-entry or by court proceedings.
Both the High Court and the County Court have jurisdiction to grant relief from forfeiture for non-payment of rent on terms as to payment of rent and costs. Most applications will be made in the County Court because the CPR provide that only in exceptional cases should proceedings be brought in the High Court.
In the case of forfeiture by action, relief is automatic if the arrears of rent and costs are paid within the timescale ordered by the Court (not less than 4 weeks from the first hearing (S138 County Courts Act 1984). Relief is discretionary if forfeiture is effected by peaceable re-entry (S139 CCA 1984).
The Coronavirus Act 2020 received Royal Assent on 25 March 2020 and and applies (insofar as relevant to this note) from 26th March 2020
Section 82 ideals with forfeiture against commercial tenants in arrears with rent. The Act applies to relevant business tenancies which are defined as tenancies to which Part 2 of the Landlord and Tenant Act 1954 applies (premises occupied for the purpose of business); or would apply if a relevant occupier were the tenant. Relevant occupier is defined as being a person other than the tenant who lawfully occupies the premises or part of them.
The Act that provides that for the relevant period – namely from 26 March 2020 until 30 June 2020:
The effect of the Act therefore is:
The Act provides that the Government may extend the relevant period beyond 30 June 2020 by statutory instrument.
Tenants should be aware, however, that any unpaid rent remains payable despite the provisions of the Act and the Act does not apply to other remedies open to a landlord such as distraint, court proceedings, insolvency proceedings or claiming from a guarantor or former tenant.
This article written on Commercial Tenants & Rent Arrears under the Coronavirus Act 2020 is written by Christopher Wilkins if you’d like any further information on how to instruct Christopher or any other member of our Property Team please contact Jonathan Cue on 020 7353 0711 or via email.