27th September 2022

Coronavirus ‘Protected Rent’ – no longer protected

Landlords or tenants who have not yet resolved issues over unpaid rent from COVID lockdown periods should now seek urgent advice

The Commercial Rent (Coronavirus) Act 2022 provided a continuing interim moratorium that provided respite for commercial tenants against landlord’s enforcement procedures being pursuing for unpaid rent that had fallen due during periods when the business tenant had been required to close their business premises during the height of the pandemic by government regulations (‘protected rent’). The intention of the further moratorium was to enable tenants and landlords to agree terms and to enable disputes on whether a tenant should be granted ‘relief’ to be referred to the new arbitration scheme created by the Act. In our experience, that arbitration scheme has seen little use.

Most tenants and landlords have engaged with each other to seek to agree terms; but some have not or have not yet reached agreement.

That moratorium lasted for 6 months from 24 March 2022 and has now ended (except where there is a pending arbitration).

The moratorium had temporarily prevented landlords from using the following remedies when they were seeking to recover only ‘protected rent’.

  • Forfeiture
  • CRAR
  • Service of Section 81 notices un sub-tenants
  • Statutory demands
  • Winding Up Petitions
  • Appointment of administrators over the tenant
  • Bankruptcy Petitions
  • Debt claims
  • Using rent deposits and requiring them to be replenished
  • Demands on guarantors

Those remedies are now fully available to landlords again and tenants who have not paid that rent or agreed clear terms for doing so, should now seek advice urgently.

For specialist advice contact Mark Cullingford mcullingford@thrings.com (Business Restructuring & Insolvency) or Michael Tatters mtatters@thrings.com  (Commercial Lease Disputes).