Real Estate Tip of the Week: Forfeiture Has Gone Viral

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Real Estate Tip of the Week: Forfeiture Has Gone Viral

Published 6 April 2020

As part of its comprehensive and unprecedented package of financial assistance, business tenants have now received protection from forfeiture thanks to the Coronavirus Act 2020 (the "Act”).

However it does not extinguish the debt, nor does it waive forfeiture as a remedy in the future.

Protection from forfeiture (see s.82 of the Act) is a time limited moratorium. Tenants that have not paid the rent due on 25 March are safe, but only until 30 June 2020 unless Government seeks to extend that date. As the landlord’s right to forfeit for non-payment of rent does not usually crystallise until at least 14 days after the rent is due (see your lease for the period before you can forfeit the lease), this legislation will afford no protection should tenants decide not to pay the rent due on the June quarter day.

Should a tenant seek to take unfair advantage of the protection where they can still afford to pay the rent in full on a quarterly basis, landlords can still sue for non-payment, claim interest on monies received late, initiate the statutory CRAR process or apply to have tenants wound up.

Authors

Nick Marshall

Nick Marshall

London - Walbrook

+44 (0)20 7894 6886

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