Protections From Forfeiture Extended
- AuthorBenjamin Davies
The Welsh Government has recently taken action to introduce a further extension to the protections from forfeiture for non-payment of rent for business tenancies in Wales. The 3 month extension is being introduced by way of the Business Tenancies (Extension of Protection from Forfeiture etc) (Wales) (Coronavirus) Regulations 2021 (SI 2021/253 (W 66)) (‘the Regulations’) which will come into force on 31 March 2021. Similar legislation has been passed in England.
As many commercial landlords will know, the emergency measures introduced by Section 82 of the Coronavirus Act 2020 mean that landlords are temporarily unable to exercise a right of re-entry or forfeiture for non-payment of rent. These protections were originally meant to apply from 26 March 2020 to 30 June 2020 (i.e. the Relevant Period). However, the Relevant Period has since been extended and was due to expire on 31 March 2021.
The introduction of these new Regulations by the Welsh Government mean that the Relevant Period has now been extended to 30 June 2021. Therefore, any landlords with a relevant business tenancy hoping to exercise a right of re-entry or forfeiture for non-payment of rent will now be prevented from doing so until at least 1 July 2021.
Whilst many commercial businesses may welcome this extension, this will no doubt come as a further blow for many landlords hoping to regain possession of their premises where they have tenants who may not have paid rent for many months. However, commercial landlords can still issue proceedings against a tenant for a money judgment in respect of rent arrears. It is also possible for terms of the Lease to be varied so that acceptable terms for the payment of any arrears can be documented with a view to maintaining a good working relationship between Landlords and Tenants into the future. Whilst Landlords are entitled to rely on the terms of the Lease and seek full payment, many are agreeing to accommodate delayed or part payment terms and we would encourage discussion between Landlord and Tenants. Any agreements which vary the terms of the Lease should be properly documented to protect both the Landlords and Tenants position.