Are you a tenant of residential or commercial property?

Thursday 26th March 2020

Amendments to the Coronavirus Bill 2019-21 have now been published by the Government which will impact on residential and commercial lettings in England and Wales.

Residential Tenancies

The amendments are intended to require landlords to give a longer 3 month notice period before commencing proceedings for possession although this period may be extended to 6 months by the Secretary of State.

The amendments will come into force on the day after the Bill is passed. The earliest date on which the Bill is likely to be passed is Friday 27 March 2020 as the House of Lords are due to consider it on 25 and 26 March.

The provisions are not retrospective so there is a risk that landlord’s may serve notices now before the legislation comes into force to increase the notice period. If notice has been served before the changes to the legislation come into effect, it appears that possession proceedings can still be issued in Court and processed by the Courts (as these can be dealt with on paper by Courts and Judges whilst complying with social isolation requirements).

Unfortunately,  there is nothing in the Bill to assist tenants who find themselves in financial hardship and running up rent arrears as a result of coronavirus.

Business Tenancies

In contrast to the residential tenancy position, business tenancies are expressly protected. Landlord’s will have no right of re-entry or ability to forfeit tenancies for non-payment of rent from the day after the day on which the Act comes into force until 30 June 2020 (or such later date as the Secretary of State may specify).

If litigation seeking forfeiture of a tenancy as a result of rent arrears is already underway, the tenant cannot be evicted until the end of the relevant period (30 June 2020, or such later date as the Secretary of State may specify).

Failure to pay the rent during the relevant period is not to be treated as persistent delay in paying rent for the purposes of grounds for landlords to object to the grant of renewal leases under the Landlord and Tenant Act 1954.

What does this mean?

The proposed changes for business tenants are significantly more generous than for residential occupiers. Effectively, the changes amount to a rent deferment for commercial tenancies because they cannot be evicted for non-payment of rent until the relevant period expires. However, there is some uncertainty about the timing as it is not likely to come into force until the next rent quarter day (25 March 2020) has passed.

If require advice or assistance in relation to property or other legal matters please do not hesitate to contact the team at Waldrons.