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Government delivers further blow to landlords in further restricting winding-up petitions

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Published 25 September 2020

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The government has confirmed that restrictions on commercial landlords on presenting a winding-up petition against tenants that have not paid rent are to be extended to the end of 2020.

The announcement follows confirmation last week that it has extended its moratorium preventing the eviction of commercial tenants for non-payment of rent until the end of 2020.

Whilst the announcement will be welcomed by tenants supporting them into the important Christmas trading period, landlords will undoubtedly feel that their own financial position is being ignored.

Gavin Kramer, a Senior Associate in the Corporate Restructuring team at law firm Collyer Bristow comments.

“As fears of a second wave mount and with uncertainty about the prospects for a second lockdown, the government has moved to extend the temporary and partial restriction on creditor’s winding up petitions currently in force. Previously due to expire on 30 September 2020, this has now been extended to 31 December 2020.

“While the initial announcement contains no detail, this is likely to mean that no creditor’s petition can now be founded on a statutory demand served between 1 March and 31 December 2020, and no petition can be presented prior to 1 January 2021 on the basis of other evidence of an inability to pay debts unless the creditor has reasonable grounds for believing that Covid-19 has not had an adverse financial impact on the company or that the company would have been unable to pay the debt in any event.”

Rebecca Mitchell, an Associate in the Real Estate team at law firm Collyer Bristow adds.

“This announcement will, no doubt, be a source of relief to struggling tenants helping businesses recover and continue trading into the Christmas period. Yet it is likely to frustrate commercial landlords, many of which may not have received rent for several months. Landlords and tenants will need to continue to work proactively together to find ways to restructure and, hopefully, meet both parties’ financial needs.”

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Shorter Reads

Government delivers further blow to landlords in further restricting winding-up petitions

Published 25 September 2020

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Authors

The government has confirmed that restrictions on commercial landlords on presenting a winding-up petition against tenants that have not paid rent are to be extended to the end of 2020.

The announcement follows confirmation last week that it has extended its moratorium preventing the eviction of commercial tenants for non-payment of rent until the end of 2020.

Whilst the announcement will be welcomed by tenants supporting them into the important Christmas trading period, landlords will undoubtedly feel that their own financial position is being ignored.

Gavin Kramer, a Senior Associate in the Corporate Restructuring team at law firm Collyer Bristow comments.

“As fears of a second wave mount and with uncertainty about the prospects for a second lockdown, the government has moved to extend the temporary and partial restriction on creditor’s winding up petitions currently in force. Previously due to expire on 30 September 2020, this has now been extended to 31 December 2020.

“While the initial announcement contains no detail, this is likely to mean that no creditor’s petition can now be founded on a statutory demand served between 1 March and 31 December 2020, and no petition can be presented prior to 1 January 2021 on the basis of other evidence of an inability to pay debts unless the creditor has reasonable grounds for believing that Covid-19 has not had an adverse financial impact on the company or that the company would have been unable to pay the debt in any event.”

Rebecca Mitchell, an Associate in the Real Estate team at law firm Collyer Bristow adds.

“This announcement will, no doubt, be a source of relief to struggling tenants helping businesses recover and continue trading into the Christmas period. Yet it is likely to frustrate commercial landlords, many of which may not have received rent for several months. Landlords and tenants will need to continue to work proactively together to find ways to restructure and, hopefully, meet both parties’ financial needs.”

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