Real Estate

UK

On 23 March the UK Government announced protections for commercial tenants against forfeiture and eviction if they miss rent payments due in the next three months – https://www.gov.uk/government/news/extra-protection-for-businesses-with-ban-on-evictions-for-commercial-tenants-who-miss-rent-payments

The UK Government also advised that commercial tenants would still be liable for the rent after the three months period was over.  It is actively monitoring the impact of that on commercial landlord’s cash flow.

The Coronavirus Bill in its current format doesn’t go that far.  Instead, it only protects tenants from forfeiture and eviction. It is therefore possible for landlords to continue to use all other available enforcement remedies to recover arrears from tenants.

However, the Bill is being debated before the House of Lords today (25 March) and an amendment is being moved to prevent landlords from pursuing tenants for unpaid rent altogether for three months.

SCOTLAND

Last night (24 March) the Scottish Parliament confirmed its support for the Bill – https://www.gov.scot/news/emergency-coronavirus-powers/

At the same time, the Scottish Government said that it will also bring forward emergency Coronavirus legislation to the Scottish Parliament soon.

That legislation might include protection against irritancy for commercial tenants in Scotland for the next three months.There has been no announcement of that intention by the Scottish Government.

Assuming that legislation is passed, unless it goes further than the Bill as unamended and prohibits tenants from being pursued for rent arrears, landlords in Scotland should still be able to use the other available enforcement remedies to recover arrears.

However, with the courts closed for anything but urgent business and Sheriff Officers closing down, it may be difficult for landlords to actually use any of those remedies.

Matthew Farrell