What is happening with Forfeiture of Lease in 2020?

 

During the past few months, we have a number of landlords and solicitors asking us to forfeit the leases of none paying tenants.

None payment of rent

The government has barred the landlord’s common law and contractual right to forfeit the lease for none payment of rent under Section 82 of the Coronavirus Act 2020.

At the time of writing this article (November 2020) this has been extended and lease forfeiture for non-payment of rent is suspended until 31st December 2020 in England, and until 31st March 2020 in Wales.

It only applies to tenancies that come under the 1954 Land and Tenant Act; however that is most of the tenancies England and Wales. It does not matter if the rent arrears were due before the pandemic or accrued during the pandemic it is illegal.

Other breaches

Forfeiture can be done (subject to the proper procedures and 146 Notice being served) for other breaches of the lease. We suggest you seek legal advice on this option. If you need a recommendation to one of our panel of solicitors to help, then please contact us.

You can read our guide to forfeiture of lease. Or we can be instructed here.

Commercial Rent Arrears Recovery

Commercial Rent Arrears Recovery, CRAR, is also restricted in that you need 276 days rent due to exercise CRAR.

Our opinion is this does not mean that if someone owes an amount of rent for 276 you can exercise CRAR.

Our view is that it means that you need to get your annual rent divide it by 365 then multiply it by 276. If more than this is owed you can then exercise CRAR.

Read the Government legislation here.

Again, we suggest you seek legal advice on this subject. If you need a recommendation to one of our panel of solicitors to help, then please contact us.

We can be instructed for CRAR here.

The Insolvency Act

Using the Insolvency Act by serving a statutory demand and following up with a bankruptcy petition or issuing a winding up petition is another alternative method. However this too has been made illegal for the time being under the Corporate Insolvency and Governance Act 2020.

What can I do?

You can issue a claim in the court against the tenant or if applicable against the guarantor, using the Government online service.

Most of these claims are likely to be unopposed. If so, a default Judgement can be gained within about 21 days.

Once the default judgement is gained, come back to Quality Bailiffs and we can transfer the case up to the High Court for enforcement.

The cost of the enforcement is £156 which is added to the debt. This judgment can be done at any premises the debtor trades from or lives at. The Judgement can be for other things that CRAR does not cover such as service charges and insurance.

We can be instructed for CCJ enforcement here.

We suggest you seek legal advice on this subject. If you need a recommendation to one of our panel of solicitors to help, then please contact us.

We can help

read more lease forfeiture news articles