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Commercial Tenancies and COVID legislation: What protections are set to come to an end?

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Commercial Tenancies and COVID legislation: What protections are set to come to an end?

The Coronavirus Act 2020: a quick guide showing what protections are due to come to an end.   

In this article, Commercial Property Solicitor Hannah Martin provides the dates for when the reliefs and protections for commercial tenancies are coming to an end, detailing what this means for landlords & tenants of commercial property.

These are the current dates which have been issued by the Government to date and could be subject to extensions:

24 June 202130 June 202131 March 2022
  • Changes to requirements for possession proceedings
  • Business Rates Relief reduces to 66%
  • Ban on Statutory Demands ends
  • Suspension of possession proceedings ends
  • Business Rates Relief ends

When will Business Rates Relief be reduced?

If you were forced to close your business during the lockdown then it is likely that we were entitled to Business Rates Relief of 100%.

As of 30 June 2021, this relief will be reduced to 66% until 31 March 2022. This will only be available to the business who have previously been entitled to the same.

Under a number of leases a tenant will be responsible for paying business rates and indemnifying their Landlord against any non-payment.

When will the ban on Statutory Demands be lifted?

Currently, there is a ban on winding-up petitions or statutory demands being served where they would otherwise be valid.

In order to be afforded protection from this ban it had to be shown that the inability to pay debts was COVID-related. As of 30 June 2021 this ban is due to come to an end.

When does the eviction ban end for commercial tenancies?

Under current legislation, Landlords cannot forfeit or seek possession of commercial property unless rent has remained unpaid for 457 days.

On 24 June 2021 this will increase to 554 days until the suspension is lifted on 30 June 2021. After this date the Landlord will be able rely on the rights contained in the lease to recover any arrears or forfeit the Lease.

When does the rent non-payment forfeiture ban end for commercial tenancies?

Whilst there was a suspension for Landlords to forfeit leases for non-payment of rent, they were still entitled to seek forfeiture for breach of lease for any other reasons and tenants were required to comply with their obligations under commercial leases.

Within some leases, a Landlord may require a business to be open and available to the public during trading hours or on certain days of the week.

The Government accepted that if the business had been forced to close due to COVID-19 then Landlords could not make a claim for breach of the lease in respect of this.  

As the Government continue to announce the reopening of businesses, this defence will no longer be applicable if you decide to remain close.