Commercial Property Landlords Banned from Making Statutory Demands

The UK Government has temporarily banned commercial landlords from issuing statutory demands and winding up petitions against commercial tenants unable to pay their bills due to coronavirus.  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.  Under these new measures, any winding up petition 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 COVID-19.

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