As the Covid-19 pandemic continues into the new year, and the country is back in lockdown, the government is continuing to renew and update the restrictions in place relating to the recovery of property, both commercial and residential.
In this bulletin, Tom Frazer considers two of the most recent developments:
- The extension of the moratorium on forfeiture of commercial premises based on rent arrears
- The extension of the ‘eviction ban’ in England and Wales
As always, despite all that the pandemic and the Government throws it, Selborne Chambers continues to be open for business.
MARK WARWICK QC
Extension of the moratorium on forfeiture of commercial premises
On 31 December 2020, the Business Tenancies (Extension of Protection from Forfeiture etc.) (Wales) (Coronavirus) (No. 3) Regulations 2020/1456 came into force.
These regulations have extended the moratorium on bringing proceedings for forfeiture of commercial premises based on non-payment of rent (under s.82 of the Coronavirus Act 2020) to 31 March 2021.
The effect of this moratorium has been discussed in previous Selborne Chambers bulletins.
This extension was described by Robert Jenrick MP, Secretary of State for Housing, Communities and Local Government, as ‘final’, so the end may be in sight for commercial landlords struggling to recover rent from their tenants.
The restriction on use of CRAR has been extended to the same date.
Whilst the wide-ranging stay on bringing possession proceedings lifted in September 2020, on 17 November 2020 the Government introduced a ban on the execution of writs/warrants of possession and the delivery of notices of eviction lasting until 11 January 2021.
This eviction ban has been extended until 21 February 2021, pursuant to the Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021/15, which were laid before parliament on 8 January 2021 and are due to come into force on 11 January 2021.
In addition to extending the ban, the new regulations introduce important changes to the restrictions in place. The superseded regulations (SI 2020/1290) provided an exception to the ban where the case involved substantial rent arrears. These were defined as arrears of at least 9 months’ rent on the date the possession order was granted. Unpaid rent that had accrued after 23 March 2020 (the start of the first lockdown) had to be disregarded for these purposes.
Whilst the new regulations retain the exception for substantial rent arrears, this is now defined by Regulation 2(4) as being a minimum of 6 months’ unpaid rent. The prohibition on including arrears accruing since the pandemic began has been removed entirely.
This will no doubt be welcomed by landlords. The fact that arrears relied on to obtain a possession order have accrued during the pandemic is no longer an absolute bar to proceeding with eviction. Tenants are reminded that the impact of the pandemic on defendants to possession proceedings is still a matter that will be brought to the attention of the court under PD 55C.
Robert Jenrick MP has stated that the date of 21 February 2021 is under review. Given the likelihood of the nationwide lockdown extending beyond that date, it is probable that the eviction ban will be further extended.
Practitioners are reminded that, as well as substantial rent arrears cases, there are other important exceptions to the eviction ban, including:
- Trespass claims under CPR Part 55.6 (regulation 2(2)(a))
- Possession claims based on anti-social behaviour and domestic abuse grounds (regulation 2(2)(b) – (d))