Covid Real Estate Legislation Update | Cleaver Fulton Rankin

As employers see more of their staff transition back to the workplace, and businesses reopen their doors after a long hiatus, many will be keen to see how the NI Executive manage financial assistance provided since the start of the COVID-19 pandemic.

The Department of Finance in NI has extended the expiry date for legislation introduced to support businesses and employers throughout the pandemic. The “relevant period” under section 83 of the Coronavirus Act 2020 has been extended to 25 March 2022 meaning the provisions in the said Act, assisting landlords and primarily tenants in commercial tenancies, has been extended into 2022.

Section 83 states:

• A right of re-entry or forfeiture for non-payment of rent cannot be enforced during the relevant period;
• No conduct by or on behalf of a landlord, other than giving an express waiver in writing, is waiving a right of re-entry or forfeiture for non-payment of rent;
• During the relevant period, the court may not make an order for the right of re-entry or forfeiture allowing possession by the landlord before the end of the last day of the relevant period;
• Existing court orders, made before a relevant period, for the right of re-entry or forfeiture giving possession of property to a landlord cannot be invoked until after the last day of the relevant period;
• The statutory ground allowing a landlord to terminate a commercial tenancy for a persistent delay in paying rent (under Article 12(1)(b) of the Business Tenancies (Northern Ireland) Order 1996) does not apply to rent payable during a relevant period.

There have been no regulations introduced to ring fence COVID-19 arrears. However once legislation to effect the same comes into force, it is anticipated that the “relevant period” referred to in section 83 of the Coronavirus Act 2020 will come to an end.

The Corporate Insolvency and Governance Act 2020 (CIGA) introduced temporary measures to restrict the use of winding-up proceedings against companies and LLPs during the COVID-19 pandemic. The “relevant period” under the CIGA has now expired however the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 11) Regulations (Northern Ireland) 2021 introduced the following measures relating to winding-up proceedings which run until 31 March 2022:

• debt owed to the petitioning creditor must be £10,000 or more;
• a petitioning creditor must demonstrate that it has sought to negotiate repayment of a debt before seeking to wind-up a company; and
• petitioning creditors cannot use rent (or any sum or other payment that a tenant is liable to pay) as the basis for presenting a petition, unless the creditor can prove that the non-payment of the debt is not related to the pandemic.

This article has been produced for general information purposes, and further advice should be sought from a professional advisor. For advice or information, please contact the Commercial Real Estate team at Cleaver Fulton Rankin.

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