Emergency legislation to help tenants Mar20

31/03/2020

The government has unveiled new legislation to help tenants of both residential and commercial property cope with the financial impact of Coronavirus.

Residential and commercial tenants are to be protected from eviction for the next three months, so even if they are unable to pay their rent, landlords will be prevented from starting legal action against the tenant or forfeiting the lease. Any current forfeiture proceedings will also be halted until the end of June.

The proposal forms part of section 82 of the Coronavirus Bill, which is currently before the House of Lords.

Prior to this ruling, landlords would typically be able to forfeit the lease after 14 or 21 days following non-payment of rent.

Some businesses will be excluded including:

  • Licenses including serviced offices
  • Tenancies at will
  • Employment service tenancies
  • Tenancies of less than six months
  • Home business tenancies
  • Agricultural holdings
  • Mining leases
  • Code Agreements under the Electronic Communications Code 2017
  • Any other tenancies where Part 2 of the Landlord and Tenant Act 1954 is not applicable.

While these steps will provide much-needed breathing space for tenants, they could leave landlords facing cashflow problems. Similarly buy to let landlords will be left with reduced rental income while not being eligible for the mortgage holiday that residential mortgage holders are being afforded.

The rent break is due to end on 30 June but is being kept under review by the government and could be extended creating additional uncertainty for landlords.

The right to forfeiture is being postponed, not abolished, which means landlords will be able to begin proceedings or take debt enforcement action once the moratorium is lifted, provided, of course, tenants have the means to pay arrears or have a business at all at that point.

For advice on any issues affecting residential or commercial tenancies either from a landlord or tenant’s perspective, phone 01782 205000 or email enquiry@beswicks.com