Skip to main content
FIND A LAWYER
ARTICLE

Government temporarily bans landlords from serving statutory demands

Yesterday, the Government introduced new measures to protect UK high street from ‘aggressive rent collection’.  The update is available here.  The measures intend to safeguard the UK high street by temporarily voiding statutory demands and winding up petitions issued to commercial tenants.

Whilst the majority of landlords and tenants are working together to reach agreement on rent obligations, some landlords have been taking aggressive debt recovery action.  To prevent these unfair practices, the Government will temporarily ban the use of statutory demands and winding up petitions if a company cannot pay their rent due to coronavirus.

The guidance refers to ‘high street shops and other companies’, so the scope of protection is not entirely clear.  It would seem to apply to ‘retailers’ only but could be read as applying to any commercial tenant in arrears due to coronavirus.  The Corporate Insolvency and Governance Bill (yet to be introduced) should clarify the extent of the protection.

Any winding-up petition must first be reviewed by the court to determine why.  If the reason for the inability to pay rent is the result of coronavirus, the court will not permit petitions to be presented, or winding-up orders made.  It seems landlords can still take such action for historic rent arrears accrued before the pandemic.

The Government is also laying further legislation to prevent landlords using Commercial Rent Arrears Recovery (CRAR) unless the unpaid rent exceeds 90 days.

The temporary measures will be in place until 30 June 2020 but can be further extended by the Government.

The Government continue to support landlords including the recent expansion of the Coronavirus Business Interruption Loans Scheme. The Government acknowledges that landlords are facing their own pressures and are working with banks and investors to seek ways to address these issues.

If you have any queries in relation to this update or want to discuss steps you can take to protect your position, please do get in touch.  We will keep you updated with important developments.

This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: mailinglists@greenwoods.co.uk




    By completing and submitting this form, you consent to Greenwoods Legal LLP processing your personal data to provide you with the email update services you have selected and any other materials and information about our services that Greenwoods Legal LLP reasonably believes will be of interest to you. You are free to withdraw your consent at any time by emailing mailinglists@greenwoods.co.uk





      By completing and submitting this form, you consent to Greenwoods Legal LLP processing your personal data to provide you with the email update services you have selected and any other materials and information about our services that Greenwoods Legal LLP reasonably believes will be of interest to you. You are free to withdraw your consent at any time by emailing mailinglists@greenwoods.co.uk