Government Announcements to Support Landlords and Tenants
We were waiting with bated breath for the government to announce some changes to assist both landlords and tenants during this difficult Alert 4 lockdown period. On 15th April 2020, the Government announced changes to extend periods which apply to the cancellation of leases and the periods of time which apply before a mortgagee can exercise rights in relation to mortgaged land and goods. These changes will be passed into law on 27 April 2020 and will have a retrospective effect.
Under the Property Law Act 2007, a landlord was required to give a tenant at least 10 working days’ notice before it can re-enter and terminate a lease. This period has now been extended to 30 working days.
A mortgagee (i.e. a Bank) is now required to give 40 working days’ notice before it can exercise its rights in relation to the mortgaged property (for example; the right to enter into possession or sell the property). Previously this time frame was 20 working days.
If a party has a security interest over personal property (e.g. a car) they must now give 20 working days’ notice (increased from 10 working days’ notice) to the owner of that property or anyone else who has a security interest in that property before they can exercise rights to sell.
The Prime Minister has stated that these measures have been announced to bring commercial leases in line with the recent changes to rights to evict residential tenants. She urges commercial landlords to “be a good citizen” and consider what will happen if you do terminate a commercial tenancy during this time and who you will get to tenant these premises. She wants landlords to “take a long view, work with your tenant and be a good human being”.
We are hopeful that landlords will take this message to heart.
For more information on the changes announced by the government (including tax changes) read here.
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