News and Events

Forfeiting a commercial lease during COVID - 19

Since the outbreak of the coronavirus pandemic, significant restraints have been placed on commercial landlords' abilities to recover arrears of rents from their tenants.

The Government introduced emergency legislation, the Coronavirus Act 2020, which among other things, introduced new rules.  The rules mainly protect tenants who it was assumed would have increasing difficulty paying their rent. Currently, landlord remain unable to enforce a right of forfeiture for non-payment of rent in relation to a business tenancy until 25 March 2022 at the earliest.

However, there is currently no prohibition on forfeiting for any other breaches of covenant, so all other lease terms still have to be complied with by the tenant. This means that landlords can still repossess if there are other breaches e.g. carrying out unauthorised alterations or failing to keep the property in repair.   A warning notice must be served first, requiring the breach to be rectified.

It should be noted that, if court proceedings are required, there is a significant backlog of cases to be heard so this will cause delay.  A landlord can also sue for damages to recover losses arising from the breach and such debt claims are often progressed more quickly. 

Whether you are the landlord or the tenant under a commercial lease, it is strongly advised that you obtain specialist legal advice in relation to potential lease breaches at the earliest opportunity.  Please contact Lochana Gabrielsen on 01825 747155 or any member of the Commercial Property team.