Freeths Real Estate Law Blog: Landlord's Forfeiture Rights Suspended

Last updated 14:30, 19th October 2021

The Coronavirus Bill (which received Royal Assent on 25 March 2020, having been fast-tracked through parliament) suspends a landlord's ability to forfeit and or oppose a business tenancy under the Landlord and Tenant Act 1954. The headline points are:

• From the 25 March 2020 until the 25 March 2022 (unless pushed out further) (“the Relevant Period”) a landlord may not forfeit a commercial lease for non-payment of rent.
• A landlord cannot waive the right to forfeit unless it expressly chooses to do so in writing, seemingly allowing rent deferment and payment plans to be put in place.
• If an order is made in the High Court or County Court during this period granting a landlord possession, the tenant does not have to give up possession until the end of the Relevant Period.
• A landlord cannot rely on failure to pay rent during the Relevant Period to support an application to oppose a business tenancy under the Landlord and Tenant Act 1954 on the grounds of a persistent delay in paying the rent.

An interesting point to note is that non-payment does not have to be due to Coronavirus - the legislation applies to any failure to pay. Nothing in the legislation operates to remove the liability to pay rent, and indeed in each case that has been heard so far, the Court has found that the rent remains payable. Whilst the devil is inevitably in the detail, the legislation may at least provide tenants with some comfort that they will not lose their premises. However, a landlord still has its other remedies available and so it would be prudent for tenants to enter into dialogue with their landlords as soon as possible, to discuss how they can work together to get through the next quarter. For more information or guidance, please do contact one of Freeths' Real Estate Litigation Team.