September 25. 2020

UK Government extends ban on commercial landlords from making statutory demands until end of 2020


The Government has confirmed that it will be extending the temporary ban on commercial landlords issuing statutory demands and winding up petitions against commercial tenants who have not paid their rent during the COVID-19 pandemic. A statutory demand can be issued where a corporate debtor owes £750 to a creditor. If the debt is not paid within 21 days of the issue of the statutory demand, the landlord creditor can then issue a winding up petition against their tenant. Although in most cases a landlord does not ultimately want their tenant to be wound up (as that could lead to them having to take back the premises), the procedure is sometimes used to put pressure on tenants to pay their rent. Currently, any statutory demand served from 1 March 2020 and any winding up petition presented from 27 April that claims that the company is unable to pay its debts must first be reviewed by the court to determine why. The law will not permit petitions to be presented or winding up orders made, where the company’s inability to pay is the result of the COVID-19 pandemic. These measures were due to end on 30 September 2020, however the Government has announced that they will be extended until the end of the year (i.e. 31 December 2020).

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