Dispute Resolution

Commercial Property Forfeiture- Goodbye Ring-Fenced Rent

All restrictions against forfeiture for arrears of rent are due to come to an end by the 24th September 2022.

19 Oct 2022

Team name
Holly Minney

Holly Minney

In April 2022, the majority of the restriction against commercial Landlords preventing them for forfeiting leases for rent arrears were bought to an end. However, for a transition period, Ring fenced rent (defined below) remained protected.

Ring fenced rent was arrears that were accrued during the period from 23rd March 2020 to a date on which the relevant business sector was allowed to re-open. The latest date being 18th July 2021.

Landlords are not allowed under these provisions to seek to forfeit a lease or seek recovery of these protected arrears. A procedure was put in place where the arrears could be referred to an arbitration process to be determined.

The last date in which to seek a referral to arbitration was the 24th September 2022. If no referral has been made by this date any moratorium the tenant has will come to an end.

Therefore, if by the 24th no referral has been made, the landlords will be back to the pre-covid legislation position and may seek to forfeit a lease if there are arrears (and all other requirements are met).

If you are considering forfeiting a lease, please contact our litigation team to discuss the process.

M&P Commentary

Holly Minney, Head of the Dispute Resolution team, said:

“It will be nice to see the end of all the Coronavirus legislation that restricts commercial landlords rights and for landlords to be in a position to determine for themselves how they wish to proceed with a tenant.”

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