A new measure to keep tenancies intact pending the working-out of the current pandemic has been introduced.
The new Practice Direction 51Z was introduced on 27 March 2020. It has the following effect:
- all proceedings for possession brought under CPR Part 55 are stayed (i.e. no procedural step can be taken or any order made) until 25 June 2020;
- where an order for possession has already been made, no warrant (in the County Court) or writ (in the High Court) of possession can be enforced until 25 June 2020.
This is a tightening of the emerging overarching political goal of the current UK Government, which is to keep contractual relations as far as possible intact and defer creditors' rights to enforce by several months, pending a possible end to the current crisis. All of the steps taken so far seem designed not to alter, reduce or cancel liabilities, but to postpone any consequences of default until June at the earliest.
Section 81 and Schedule 29 of the Coronavirus Act 2020 which came into force on 25 March 2020 had already extended the notice periods for terminating almost all forms of residential tenancies.
Section 82 of the Act had already for all practical purposes suspended the law of forfeiture for non-payment of rent until 30 June 2020. There is a narrow range of lease terminations available - forfeiture of commercial premises by peaceable re-entry for breaches of the lease other than non-payment of rent.
Tenants who are in breach of their covenant to trade by shuttering their business may be concerned that they are exposed.