Protection for business tenants under the Coronavirus Act 2020

The Coronavirus Act 2020 (CVA 2020) came into force on 26 March of this year in response to the overwhelming effects of the coronavirus pandemic. The Act has significant implications for landlords and tenants and considerably impacts the ability of landlords to recover possession of property, which will be welcome news for any operators who lease their premises.

The Act effectively protects commercial tenants who cannot pay their rent as a result of the COVID-19 outbreak by preventing landlords from being able to evict them within the relevant period (as detailed below).

CVA 2020 Restrictions on Landlords

The CVA 2020 provides that during the period of 27 March 2020 to 30 June 2020 (the relevant period), or until whatever date the relevant period may be extended to, a landlords’ ability to forfeit a lease in relation to a relevant business tenancy will be restricted as follows:

• Landlords will be unable to enforce a right of re-entry or forfeiture for non-payment of rent.
• No conduct by or on behalf of a landlord is to be regarded as waiving a right of re-entry or forfeiture for non-payment of rent, unless the landlord gives an express waiver in writing.
• Any possession orders following High Court proceedings for non-payment of rent that have already commenced must ensure that a tenant does not have to give up possession of the property until after the relevant period has ended.
• If the High Court has already made a possession order due to non-payment of rent, which requires possession to be given during the relevant period, the tenant can apply to vary the order and in that instance the High Court must ensure that possession is not required before the end of the relevant period.
• Any possession orders made following County Court proceedings to enforce a right of re-entry or forfeiture for non-payment of rent that have already commenced, must ensure that a tenant does not have to give up possession of the property until after the relevant period has ended.
• Where the County Court has already made an order for possession to enforce a right of re-entry or forfeiture for non-payment of rent which requires possession to be given during the relevant period, the date for possession will be treated as having been extended so that it expires at the end of the relevant period.