COVID-19: Protection for Commercial Tenants

The Government has announced measures to protect commercial tenants who cannot pay rent because of COVID-19, from eviction. If you need help with renewals, evictions or breach of tenancy, our expert business tenancy solicitors are ready to help you.

Business tenancy

Tenancies of business premises will usually be business tenancies governed by Part II of the Landlord and Tenant Act 1954. This is a completely different regime from residential tenancies. If you are unsure what type of tenancy you have, we can review your lease agreement and advise you.

Section 82 of the Coronavirus Act 2020 has been introduced to afford more protection to commercial tenants during this pandemic.

What can I do if I cannot pay my rent during COVID-19?

If the tenant breaches the terms of the lease (including breaching the term to pay rent) and the landlord wishes to evict the tenant, then the landlord needs to forfeit the lease, which is only possible if the lease provides for re-entry in the circumstances of the breach which occurred.  Section 146 of the Law of Property Act 1925 also applies and (except for non-payment of rent) requires the landlord to give the tenant notice of the breach and an opportunity to remedy it (if this is possible). 

Between 26 March 2020 and 30 June 2020 (“the relevant period”), under the Coronavirus Act 2020, a landlord is unable to exercise a right of re-entry or forfeiture (termination) of a tenancy for non-payment of rent, evict a tenant or treat failure to pay rent as persistent delay in paying rent.

Commercial tenants should note however that the protections only offer a rent deferment in the current circumstances and they will still be liable to pay rent arrears after the relevant period.

It is recommended that tenants engage in discussions with their landlords to seek to agree a rent suspension or reduction. If you have been unsuccessful in reaching an agreement, our Alternative Dispute Resolution solicitors can assist you in conducting negotiations in order to reach an optimal resolution.

Tenants should also contact their insurers and consider their insurance policy to see if business interruption is covered.

We can review your lease agreements and insurance policies and advise you on the best possible course of action.

My landlord wants to close the property because of COVID-19

Tenants should consider their lease carefully if it contains a force majeure clause, however the majority of leases are unlikely to contain express wording dealing with the event of a pandemic. If COVID-19 amounts to a force majeure event, it may entitle the landlord to suspend or terminate the lease.

Although the majority of commercial leases often contain similar provisions, all leases are different and each situation will need to be considered on its particular facts.

The grounds to terminate a business tenancy are set out in Section 25 of the Landlord and Tenant Act 1954. Landlords who are seeking possession during this time must show a ‘very good reason’ for doing so.

If your landlord is seeking to terminate your tenancy, we can review your lease agreement and advise you on your rights and any possible course of action.

Can my landlord seek possession of the property during the pandemic?

In line with current public health advice to prevent all non-essential movement, during the relevant period (26 March 2020 to 25 June 2020), there is a suspension of possession cases which will affect new and existing claims.

If your landlord is threatening or seeking possession, we can advise you on your rights and any possible course of action.

Instruct Property Litigation Lawyers

Our primary aim is to get results for our clients. The property litigation team includes qualified solicitors and barristers whom have leading experience of high value landlord and tenant commercial disputes.

We are a specialist City of London law firm made up of Solicitors & Barristers operating from the only law firm based in the Middle Temple Inns of Court adjacent to the Royal Courts of Justice.

If you are a commercial tenant and wish to obtain advice on your current position, please call our property litigation team on ☎ 02071830529