COVID-19 COMPANY AND BUSINESS TENANCY NEWS - THE GOOD AND THE BAD

The restrictions on service on companies of statutory demands and the presentation of petitions to wind them up were due to run out on 30 June 2021. They have been extended until 30 September 2021 by the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of Relevant Period) (No 2) Regulations 2021 (SI 2021/1718) which were laid before Parliament today 21 June 2021. However, what are not and will not be extended are the measures which protected company directors from complaints of 'wrongful trading' and the small trader exemption from termination clause provisions which will lapse on 30 June 2021. These changes apply throughout Great Britain. 

The government has announced that the ban on eviction measures against business tenants in England which was due to expire on 30 June 2021 will be extended to 25 March 2022 - legislation to give effect is awaited any minute - and that legislation is to be put before Parliament in the current session to ring fence rent arrears owed by business tenants and which have been run up during covid closures. Landlords and tenants will be helped - no the government won't be stumping up the cash! - to reach an agreement about the arrears. If no agreement is reached, the dispute will be settled by an arbitrator whose decision will be binding on both sides. The ring fencing scheme will not apply to rent which accrued due before March 2020 or is clocked up after all restrictions are lifted.

The increase in the amount of rent arrears outstanding from business tenants in England and Wales before notice of enforcement can be given and an enforcement agent can be sent in to seize property under the commercial rent arrears recovery scheme currently stands at 554 days. That's thanks to temporary covid legislation. This legislation is to be extended but the 554 days' worth will stand for the time being.

The covid ban on residential evictions in England has been lifted.

COVID-19: REPRIEVE FOR TENANTS

The majority of residential tenants due to be evicted from their homes have been granted a further reprieve in England until 21 February 2021. The reprieve is in the same terms, except for one important exception, as the last one: see  https://www.breakinglaw.co.uk/search/label/COVID-19   The exception is that evictions can go ahead where the tenant owed at least nine months' worth of rent which had been run up before 23 March 2020. That has now been reduced to at least six months' worth of rent. Tenants should give thanks to and landlords should curse The Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021 (SI 2021/15) which, unlike its predecessor, does not halt bailiffs' seizure of goods. Despite the reprieve, which also protects mortgage borrowers, possession proceedings may still be brought and possession orders may still be made by the court, although not enforced by a bailiff or High Court enforcement agent where the regulations apply.

For Wales, a similar, but not identical, reprieve has been granted by The Public Health (Protection from Eviction) (Wales) (Coronavirus) Regulations 2021 (SI 2021/12) and, just to be different, they have placed the name of the dreaded virus in a different place to England. The Wales regulations prevent evictions for a longer period until 31 March 2021 but must be reviewed earlier and so could be brought to an end earlier. They do not make an exception for cases where the arrears had reached six or nine months. 

Some crumbs for business tenants too. The paralysis on landlords being able to forfeit their leases or go into their premises to take them over where there are rent arrears has been extended from 31 December 2020 to 31 March 2021,  in England by SI 2020/1472 and in Wales by SI 2020/1456.

COVID-19: Business Tenants: Reprieves Extended: England & Wales

Bad for business tenants if they are behind with their rent. Good news for business tenants if they feared the landlord sending in a bailiff to seize stock, their copies of Breaking Law and their padadol tablets to sell and pay off those arrears. Landlords are currently paralysed from forfeiting a business lease and bringing court proceedgs to have the tenant evicted until 30 September 2020. That period has been extended until 31 December 2020 by the Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No 2) Regulations 2020 SI 2020/994 laid before Parlimant yesterday. The same change has alreday made for business tenants in Wales. And there's an increase in the amount of rent that has to be in arrears before a bailiff can be sent in under the commercial rent arreras recovery scheme. Pre-pandemic it was seven days' worth. From 25 April 2020 this was raised to 90 days. There was a further increase from 24 June 2020 to 189 days. By the Taking Control of Goods (Amendment) (Coronavirus) Regulations 2020 SI 2020/1002 applying to business premises in both England and Wales, the figure is raised from 29 September 2020 until 24 December 2020 (inclusive) to 276 days' rent and from 25 December 2020 to a temporary 366 days.

Business Rent Arrears: Trap for Landlord

If a tenant of business premises is at least one week behind with the payment of rent, the landlord can send in an enforcement agent (they are regulated bailiffs who pack quite a punch - not literally) to seize goods to cover the rent due and the costs involved in seizure. This is done under what is called the commercial rent arrears scheme which was set up by the Tribunals, Courts and Enforcement Act 2007 and the Taking Control of Goods Regulations 2013 (SI 2013/1994).

Once the landlord has used the scheme, can they have a second bite of the cherry by forfeiting the lease? The Court of Appeal has just ruled that they can't. Forfeiture would be unlawful because the landlord would be treated as having waived their right to forfeit by using the scheme and liable to pay damages to their tenant. That could be you!!!  This ruling has come in a case called Brar and another v Thirunavukkrasu [2019] EWCA Civ 2032.