The Coronavirus Act 2020 – The moratorium on forfeiture explained

30 April 2020

The restrictions imposed by the UK Government to help fight the spread of Coronavirus have hit thousands of businesses over the last few weeks. An Office for National Statistics survey found that 25% of businesses had temporarily closed or paused trading in the UK, based on answers of over 5,000 businesses surveyed.

In order to protect businesses and the economy, the Government has introduced provisions, under section 82 of the Coronavirus Act 2020 (the “Act”), preventing landlords from enforcing rights of re-entry or forfeiture (by proceedings or by peaceable re-entry) against relevant business tenants for non-payment of rent during the relevant period.

The moratorium on forfeiture will effectively mean that landlords will not be able to bring a lease to an end where tenants fail to pay rent for the period between 26 March and 30 June 2020, or such later date as the Government may see fit to ensure adequate protection for businesses.

What is rent?

For the purposes of the Act, the term “rent” includes any sums payable under the lease and extends to service charge, insurance payments, utilities, interest and any other payments due.

Relevant business tenants

The moratorium will apply to all business tenants as defined in Part 2 of the Landlord & Tenant Act 1954. This covers all business tenancies, but will not apply to those occupying by way of a tenancy at will or other contractual arrangement which does not grant exclusive possession. Similarly, the moratorium does not apply to short leases of six months or less (except where the lease contains a right to renew beyond six months, or where a period of prior occupation together with the lease term exceeds 12 months).

Cause of arrears
The tenant will not be required to prove that the rent arrears were caused by the outbreak of COVID-19.


These provisions do not waive or even suspend a tenant’s obligation to pay rent under a lease, it simply prohibits forfeiture for a period of time. The moratorium on forfeiture does not therefore mean the debt is written off: other remedies for the recovery of rent, such as a pursuing guarantors (including any liable under an Authorised Guarantee Agreement) and withdrawing from a rent deposit,  are still available options for landlords whose tenants fail to pay rent. However, the Government’s press release last week confirmed that further emergency measures will be enacted to protect tenants from landlord’s serving statutory demands  and Commercial Rent Arrears Recovery will only be available to landlords when 90 days or more of unpaid rent is owed. 

In addition, once the moratorium ends,  landlords will be able to forfeit leases for both unpaid sums due during the moratorium period and for any unpaid sums that become due after it is lifted, including any accrued interest.

Lastly, it is important to note that the Act only prevents landlords from forfeiting leases for rent arrears, leases can still be forfeited where a tenant breaches other covenants contained in the lease such as permitted use, repair etc.


The moratorium provides a short-term tool for businesses to preserve and control their cash-flow, but they will need to budget any sums due during the moratorium, as being due by 30 June 2020, to avoid forfeiture in the future. The moratorium only defers payment so tenants should reach out to landlords now to try and negotiate rent holidays, reduced rents or alternative payment schedules. Whilst there is no obligation on the part of the landlord to agree any concession, we are seeing many landlords trying to help their tenants survive the current crises. Any agreement reached should be formally documented to avoid any ambiguity.

About the authors

Virginia Tournon is a trainee solicitor in the Real Estate team, having previously worked in the Immigration and Private Client teams.

Vanessa Rhodes  is a senior associate solicitor in the Real Estate team and is experienced in a range of commercial and residential property matters. 

Latest blogs & news

Giving up possession on a break: the importance of yielding up vacant possession for conditional break clauses

In uncertain times, business tenants will look to minimise their property commitments in order to reduce costs. One of their options may be to exercise a break in a lease if such an option is included. However, case law has demonstrated the importance of tenants (and landlords) strictly complying with any conditions that are attached to a break clause. Often, this includes giving a landlord vacant possession, following the exercise of a tenant’s break notice. Failure to do so can be costly and have drastic consequences for a tenant; any failure to comply with a condition is likely to invalidate the break, resulting in the lease continuing for the remainder of the original term.

Economic Crime (Transparency and Enforcement) Act 2022 – The Long-Awaited Introduction of the Register of Overseas Entities

The Government has for some time promised to introduce a register requiring overseas entities holding UK property to identify its beneficial owners, in its effort to increase transparency in UK property ownership and reduce the attraction of the UK’s property market to money launderers. Indeed, we last blogged about the potential overseas entities register in May 2019. With UK-based entities subject to strict information-sharing requirements since 2016 (in the form of the register of People with Significant Control or “PSC Register”), many have been calling for an equivalent overseas entities register to be implemented to provide a way of tracking overseas owners who ultimately own and control UK land.

Top Tips for Commercial Landlords as Pandemic Restrictions Ease on Rent Arrears

Under s.82 of the Coronavirus Act 2020, a moratorium has been imposed on all landlords in England who have been prevented form forfeiting commercial leases on grounds of arrears with effect from 26 March 2020. Those restrictions are currently due to come to an end on 25 March 2022.

NFTs and Real Estate – The Purpose, Prospects and Possibilities

In March 2021 Twitter founder Jack Dorsey sold his very first Tweet as an NFT for $2.9 million. Around the same time the Land Registry ran a series of pilots to explore the possibility of using blockchain technology, such as NFTs, to provide some much needed modernisation and efficiency to the property buying process. 

Blue plaques and what they mean for a property owner

Blue plaques can be found on buildings throughout London marking where prominent historical figures have lived and worked.  The scheme was founded in 1866 and is now run by English Heritage. Similar schemes are run outside of London by local authorities and organisations. 

Cladding Crisis – finally, a workable solution or more empty promises?

The Housing Secretary has detailed the government’s plan to “reset” its approach to building safety in order to “protect leaseholders and make wealthy developers and companies pay to fix the cladding crisis”.

Property Fraud – What to Look Out For

In an increasingly digital world, real estate transactions have become a major target for fraudsters in recent years, with figures showing that property fraud has cost the UK Land Registry more than £70 million over the past 14 years. In 2020 alone, the Land Registry paid out £3.5million in compensation for fraud related cases. Despite advances in security enhancements and rules and regulations, the real estate sector has seen some of the largest instances of fraud, more so than any other industry, and with criminals becoming ever more imaginative this shows no sign of changing.  


I’m buying a listed property - How do I check a recent kitchen extension was done with the right approvals?

If you’re looking to buy a house which is listed, it will no doubt be a unique and interesting property full of character. However, you are right to be aware that the fact it is listed means there are additional controls over any works to the property

Save the Date - Energy Performance Certificate (EPC) regulation changes for commercial property on the horizon

As you’ll be aware from some of our previous articles, energy efficiency is a hot topic in the property world, and more changes are on their way regarding the minimum energy efficiency standards (MEES) for commercial properties in the UK.

Green leases – a way for landlords and tenants to meet their environmental targets

With Extinction Rebellion taking to the streets this week for a city-wide protest, it would appear that beyond the pandemic, environment and sustainability will be the key issue that the UK is faced with. Within the rented housing market there are a number of ways in which landlords and tenants can create more environmentally friendly properties, including entering into a green lease.

The future of the City: An insight into the effect of coronavirus on commercial tenants

On 16 March 2020 Number 10 advised those living in the UK against “non-essential travel” in order to curb the growing outbreak of Coronavirus. This encouraged many office-based businesses to communicate to their employees that they should work from home until further notice. 

Constructing additional floors on top of existing blocks of flats

The UK is currently facing a housing crisis. Looking at London in particular, the property market has not been able to support the exponential growth of residents in the capital. 

Buying property with crypto assets: Can it ever be justified?

A Director at the National Crime Agency recently voiced concern about crypto assets being used to fund property purchases in the UK. The NCA’s Nigel Leary was quoted by The Times as saying: “Anything purchased with crypto assets I’d be slightly sceptical about. I’d like to see why they’re being done in that way and what the requirement is for that anonymity, and why it needed to be done in a crypto transaction.”

Buying property with crypto – are we transforming real estate?

The price of Bitcoin and other crypto assets is notoriously unstable. Whether caused by a cryptic crypto related tweet from a billionaire inventor, or a crypto crackdown being announced by regulators of the world’s second largest economy, the rise and fall of crypto assets continues to prove that crypto can be risky business.

Cladding Crisis – a “big, bold, globally unprecedented” answer or a partial solution?

Most of us have spent the last few months largely confined to our homes, as we do our bit to follow the “stay home” guidance and fight the pandemic. Whilst every household is different, most will attest to the stresses and strains that have evolved from not leaving the house, home-schooling, working from home, working from home whilst home-schooling or being furloughed and unable to go to work. 

The Stamp Duty Holiday was a welcome boost for the Property market, but what will follow?

As you will be aware from our earlier blog, the government introduced a Stamp Duty Land Tax (SDLT) holiday which began on 8th July 2020 and ends on 31st March 2021.

Covid Regulations and the Property Market

The Government has published the most recent Health Protection (Coronavirus Restrictions) (England) (No. 4) Regulations 2020 (“the Regulations”), taking us into a second lockdown, which will likely remind buyers and sellers of the months in which they could not view houses and building sites, and added complications to exchanging contracts, or completing  transactions. 

Stamp Duty Land Tax (‘SDLT’) ‘Holiday’ Announced: But what does it mean?

The Chancellor has today announced that there will be an 8 month temporary cut in SDLT with no charge on ‘any’ residential property transactions with a value under £500,000, by lifting the SDLT threshold from £125,000 to £500,000.

COVID-19 and Covenant Breaches in Leases and Loan Facilities

As the June quarter date fast approaches and the economic impact of COVID-19 begins to be felt across all sectors, what steps should landlords be taking to vary their lease arrangements with tenants who are unable to meet their rental obligations, and could a reduction in rental income due to COVID-19 put landlords in breach of their own obligations under their loan facilities?

COVID-19 related insights:

COVID-19 related insights:

Our COVID-19 statement

We recognise that these unique times are presenting unprecedented challenges for our clients and we are here to support you in any way we can.

Click to view

Can you get out of or suspend a contract because of Coronavirus?

Alex Torpey covers the key things to look out for if you are relying on the Force Majeure clause.

Watch the video on LinkedIn

Overcoming the challenges of co-parenting for separated and divorced parents

Rachel Freeman, Partner in our Family Law team, addresses some issues that we are seeing arise for separated parents in the current crisis.

Read the blog

Tech in Two Minutes - Episode 7 - The Coronavirus challenge for tech coworking spaces

Andrew Solomon speaks about the challenge for tech companies and coworking spaces during the current COVID-19 pandemic.

Listen to the podcast

The legal basis for lockdown

Alun Milford, Partner in our Criminal Litigation team, provides an in-depth look at the legal basis behind the current lockdown.

Read the blog

Managing your Migrant workforce in the COVID-19 crisis

On Friday 3 April, immigration partner and head of department, Nick Rollason, hosted a webinar looking at urgent issues employers are facing during the COVID-19 crisis and answered some of the key questions being raised.

Watch the webinar recording

Furlough leave and the Coronavirus Job Retention Scheme: key legal considerations for Employers

On Thursday 9 April, Andreas White, Partner in our Employment Law Team, delivered an overview of the scheme with a focus of the key legal issues for UK employers.

Watch the webinar recording

Coronavirus and the perils of signing your Will

Will instructions have apparently risen by 30% since COVID-19 reached our shores. What effect does COVID-19 have on Will signings? James Ward and Diva Shah in our Private Client team blog.

Read the blog

The juggling act of a single mother, home school teacher and head of a family team

Charlotte Bradley, Head of our Family Law Team, reflects on how the COVID-19 crisis has affected working parents like her.

Read the blog

The future public inquiry into COVID-19

Calls for a public inquiry are continuing to mount and are likely to prove difficult to resist. In this blog, Sophie Kemp considers the framework for such inquiries, and the key issues likely to form the core of its terms of reference.

Read the blog

Share insightLinkedIn Twitter Facebook Email to a friend Print

Email this page to a friend

We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.

Leave a comment

You may also be interested in:

Skip to content Home About Us Insights Services Contact Accessibility