Lawbite: Forfeiture moratorium extended in Wales

• United Kingdom

• Litigation and dispute management
• Real estate
• Real estate litigation - LawBite

09-07-2021

The Business Tenancies (Extension of Protection from Forfeiture etc.) (Wales) (Coronavirus) (No. 2) Regulations 2021

The Welsh Government have extended the forfeiture moratorium in Wales until 30 September 2021.  The Business Tenancies (Extension of Protection from Forfeiture etc.) (Wales) (Coronavirus) (No. 2) Regulations 2021 were laid before Senedd Cymru on 28 June 2021 and came into force on 30 June 2021 when the moratorium was due to expire.

On 16^th June the UK Government announced that the forfeiture moratorium would be extended in England until 25 March 2022.  The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 2) Regulations 2021 have since been laid before Parliament and also came into force on 30 June 2021.

A landlord’s ability to use Commercial Rent Arrears Recover (CRAR) for enforcement is also automatically extended. The Taking Control of Goods (Amendment) (Coronavirus) Regulations 2021 which came into force on 25 March 2021 apply in England and Wales.  These regulations increased the minimum amount which must be outstanding before a landlord can use CRAR for enforcement to a sum equivalent to 457 days’ rent where the notice of enforcement is given/ goods taken control of on or before 23 June 2021, and to a sum equivalent to 554 days’ rent where the notice of enforcement is given/ goods taken control of on or after 24 June 2021.  These restrictions were to expire on 30 June but as a result of the above regulations will be in place until 30 September 2021 in Wales and 25 March 2022 in England.  554 days or rent would be enough to cover all rental arrears falling due since the March 2020 quarter date.  We will need to wait to see whether further legislation is put in place to increase the minimum amount which must be outstanding to encompass the September 2021 quarter rent.

Key points

• tenants will welcome this move but the Welsh Government’s announcement highlights, as the UK Government’s announcement did, that tenants who can pay should do so
• on 16^th June the UK Government announced its intention to put in place legislation to support the resolution of disputes relating to commercial arrears accrued during the pandemic. When announced, it was said that the legislation will ringfence those arrears accrued whilst businesses have been closed during the pandemic, with a view that landlords make “allowances” for these arrears and share the financial impact with their tenants. These “allowances” could involve waiver of part of the rent or a longer-term repayment plan. If an agreement cannot be reached between a landlord and tenant through negotiations the legislation will mandate binding arbitration. The details will be eagerly awaited by both landlords and tenant but it is likely that we will need to wait some time for these