PropList Blog
Does Section 82 provide enough protection

Does Section 82 provide enough protection?

Section 82 of the Coronavirus Act came in to effect on 25th March 2020, with the aim of protecting commercial tenants during the crisis, banning the forfeiture of commercial leases until (at least) 30th June 2020.

But has that really worked?

At the moment, we've become aware that a number of businesses as still being put under threat through Commercial Rent Arrears Recovery (CRAR), the issuing of a statutory demand, making a debt claim or, more brutally, commencing winding-up proceedings. For many businesses with no income, particularly in leisure and hospitality, this is massive threat to survival or more correctly, a coup de grace against a helpless target.

The intentions behind the legislation were good but, in practice and with any rushed legislation, there are inevitable holes that can be exploited.

While the Government have issues statements such as "In these exceptional times, we urge landlords to act in a socially responsible way, exercising judgement and discretion with their tenants" by themselves they give no direct protection at all and the majority of landlords are far enough removed, that reputational damage with the public will be nominal.

The reality is that pushing a company this way may get the property back but, at the moment, there will be little chance of it being filled by a new party, so the building will remain empty.  The companies approached in this way will go under, with very little chance of any owed rents being paid.  This ultimately is self-defeating and we hope that good sense will prevail.

Above all, its about the landlord and tenant working together during this period and not becoming at odds, as this helps no one.

However, as a commercial property profession 'we know' who these parties are and they should be aware that activities like this will be remembered in their future dealings. Whilst not as vocal as the public, reputation is king in our profession.