ARE YOU HAVING PROBLEMS WITH YOUR COMMERCIAL RENT
If your business is struggling to pay its rent and has fallen into arrears, then landlords have been placed under restrictions for an extended period regarding the tools they have to enforce the rent arrears against your business. The most notable restriction being the ability to end the tenancy and your business’ right to occupy the premises via taking peaceable re-entry of the premises (subject to the terms of the tenancy agreement) which is banned until 25 March 2022. From a commercial tenant’s perspective, this is obviously quite a harsh remedy given the direct and immediate impact, so the extension will no doubt be welcome news to tenants in these circumstances.
It may encourage landlords who have not been minded to negotiate to date, to finally come to the table and do so. On the other hand, it may mean that they look to other remedies available to them, so be mindful you do not have a full suite of protection as a tenant. We have set out within the section “What else should we be mindful of?” below other remedies that landlords still have available.
If your business is one which has been forced to closed during the pandemic, then rent arrears, incurred during this forced period of closure will be “ring fenced” which means that special rules apply to them. The full details are awaited as it’s only a proposal at this stage but it is understood that parties will beexpected to agree to share the financial burden of this unpaid rent, and where an agreement cannot be reached the parties will be subject to a new, binding arbitration process. Landlords have been warned to make provisions for this.