The Coronavirus (Scotland) Act, which came into force in April 2020, addressed the possibility that commercial landlords would evict tenants for non-payment of rent at a time when their operating capability was severely affected.
Covid-19 impacted widely on the business world, with many companies folding due to the economic pressures. The Act was instrumental in enabling struggling businesses to continue trading at a time of unprecedented upheaval.
Before the pandemic, commercial landlords only had to provide 14 days notice of eviction to their tenants for non-payment of rent. When the pandemic hit and quickly caused severe problems for businesses, the Scottish government took action to protect commercial tenants.
The minimum timescale for delivering eviction notices in Scotland increased from 14 days to 14 weeks. This legislation served an important purpose, and allowed businesses a little more time to pay their rent without the threat of eviction.
Now the pandemic is passing, however, and the economy is starting to open up once again, when will the previous rules come back into force?
‘Irritancy’ of a commercial lease is the term used in Scotland to describe the termination of a lease due to a monetary breach by the tenant, and the termination takes place prior to its official expiry date.
The breach should be for non-payment of rent, or non-payment of a service charge, for example, or perhaps failing to make an insurance-related payment with regard to the commercial premises.
The restriction on commercial landlords in Scotland, in relation to eviction notices, could end on 31st March 2022, but the Scottish government may further extend the deadline to 30th September 2022.
There is a danger that rent arrears will build up, however, and increase the threat of eviction when regulations return to pre-pandemic times. So is there anything you can do to help your business survive under these circumstances?
It’s important to seek licensed insolvency help as soon as possible when you’re experiencing cash flow difficulties – if there’s insufficient cash available to pay the bills as they become due, the business will enter insolvency.
A licensed professional may be able to negotiate a lower rent with your landlord until you’re able to repay the arrears. They could also offer advice on securing additional finance to help you pay your rent and associated costs.
If you run a limited company you must protect your creditors if the business enters insolvency, and take the correct steps to minimise their financial losses. If you fear eviction by your landlord when the rule on eviction notices changes again, Scotland Debt Solutions can help.
We’re debt specialists, and will clearly present your best options if you’re worried about legal action by your commercial landlord. Please get in touch with one of the team – we can arrange a free, same-day consultation, and work from a number of offices around Scotland.
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