Temporary moratorium: Government stops forfeiture of business leases

United Kingdom

In an attempt to help business tenants who cannot pay their rent, the Government has ordered a moratorium on forfeiture of business leases, until 30 June 2020.

This news comes just before the March quarter day and it will be welcomed by retailers and leisure businesses which have been ordered to close by the Prime Minister.

Under the moratorium, landlords will not be able to forfeit business leases if their tenants fail to pay their rent. 

The new provisions will delay the right for the landlord to forfeit and – as things stand at the moment - landlords will be able to forfeit or recover rent when the moratorium ends on 30 June 2020.

On the current draft wording, other methods of enforcement do not appear to be affected, but this is a rapidly changing position.

Robert Jenrick, Secretary of State for Housing, Communities and Local Government, has said: “We are protecting both people and their businesses by providing the urgent support they need. We know many commercial landlords are already setting a great example by working closely with tenants and offering rent deferrals or holidays.”