Update: Coronavirus protections for companies and commercial tenants extended

Protections for Companies

The UK Government announced on 24 September 2020 that measures put in place to protect businesses from insolvency (winding up) are to be extended.

The Corporate Insolvency and Governance Act 2020 introduced a number of measures which included restrictions on the use of statutory demands and winding up petitions (in relation to coronavirus related debts). These restrictions will now remain in place until 31 December 2020.

The modifications to the new moratorium procedure which was designed to give companies breathing space will also be extended to 30 March 2021.

Protections for Tenants

Separately, north of the border, the Scottish Government have, with effect from 29 September 2020 extended the provisions of the Coronavirus (Scotland) Act 2020 (and the Coronavirus (Scotland) No 2 Act 2020) to 31 March 2021.

Of significance, that means the current restrictions on irritancy in commercial leases have been extended. So, for a monetary breach of the lease (ie non-payment of rent, service charge and / or insurance), landlords require to serve a notice giving 14 weeks’ (as opposed to 14 days) before the lease can be brought to an end.

This means that irritancy will continue to be something of an almost toothless threat for non-payment, but commercial landlords and tenants should of course continue to utilise the Code of practice for commercial property relationships during the coronavirus pandemic (“the Code”), which was published by the UK government on 19 June 2020 and endorsed by the Scottish Government on 1 July 2020. A copy of the Code can be found here.