There’s no doubt that since lockdown on March 23, a huge amount has changed for everyone.
The litigation team at Archers Law are no different, with instructions increasing like never before. But while this is a positive time for the team, that is not the story for everyone.
Kenton Bazeley, partner and head of litigation at Archers Law, discusses the impact upcoming regulation changes could have on businesses…
Throughout this pandemic we have seen businesses rolling up their proverbial sleeves and “getting on with it” in usual British fashion.
Whatever your business, however, I do not accept that it has been left untouched by Covid-19 in some way.
Some have flourished. A larger percentage have seen some struggle. Many of those in the middle are yet to assess the overall impact of Covid-19 on turnover, profits, debts, borrowing, staff morale, recruitment and training, all of which will have a massive effect on the sustainability of those businesses.
We have already seen an unprecedented number of household names enter an insolvency process of some description and a larger percentage will have already taken advice, with a plan in place should the situation worsen.
Some will be right on the edge, only staying afloat due to the government assistance, and it is possible that it’s about to get worse.
Furlough payments are already drying up and the date for paying back any deferred tax and Coronavirus Business Interruption Loan Schemes (CBILS) loans looms ever closer.
It’s also a virtual certainty the banks will alter their lending policies given the additional risk of not getting paid, should the proposed reintroduction of Crown Preference take place on December 1, as the Finance Act 2020 provides.
Earlier in the year, the government passed the Coronavirus Act 2020. Parts of this act directly affected landlords and have left them hamstrung.
The details of the bill mean they have not been able to take action in the normal way for non-payment of rent, or the payment of debts – if the reason for the non-payment relates vaguely to Covid-19. They have had to accept this position and any assistance that they can muster. As the government assistance ends, so do the restrictions.
It had been planned that from September 30, landlords would be able to use forfeiture provisions and/or use CRAR (Commercial Rent Arrears Recovery) to recover rent again, but changes released on September 16 put the date for the release of the restrictions back to the turn of the year.
We are yet to hear whether the restrictions on the presentation of statutory demands and winding up petitions will also be extended to mirror these changes, or whether the courts will simply continue with their “Covid excuse” vetting process. The advantage or otherwise of these restrictions and their extension depends upon what side of the landlord and tenant relationship you sit, but any landlords patiently waiting for the restrictions to be lifted are likely to need to start taking a more proactive approach where possible.
While I blindly hope otherwise, I predict insolvency activity will dramatically increase in the coming months, leading to the potential of lots of empty premises, and many landlords out of pocket.
Finally, I do apologise. I had intended this piece to be a bit more uplifting. However, unfortunately, that is not the reality.
We’re here to help.
We understand how tough this can be for some businesses and individuals. If you are worried about the impact any of the legislative changes will have on you or your business, the team at Archers Law are here to offer advice and support.
Come and chat to us.
Partner and head of litigation, Archers Law
Tel: 01642 636500 | Web: archerslaw.co.uk