June 8, 2020

Here is our round-up of the key coronavirus related legislative and regulatory developments in the commercial property sector, during the month of May, that may impact your business. If you have any questions or concerns, please do get in touch with a member of the Property Team.

Commercial Rent Arrears Recovery – Further protection has been given to business tenants in England and Wales during the Covid-19 crisis. The minimum amount of net rent that must be unpaid for Commercial Rent Arrears Recovery (CRAR) to become exercisable (previously 7 days’ unpaid rent) has now been increased to 90 days’ unpaid rent (s 82(12) Coronavirus Act 2020). It does not appear, however, that this will be of much benefit for those tenants who pay quarterly in advance as they will already be over the 90-day threshold if rents are not paid once they fall due.

Winding-up/statutory demand restrictions – The Government has also announced new proposals to restrict the use of statutory demands and the presentation of winding-up petitions in respect of unpaid business rents. Nothing has yet been published, but it is understood rules will be introduced to prevent petitions from being presented, or winding-up orders made, where the company’s inability to pay is as a result of Covid-19.

EPCs – the Government has published guidance on EPCs while the current social distancing measures are in place. The bottom line is that the legal requirement for a valid EPC before selling or letting still remains. For commercial transactions at least, this shouldn’t be too difficult to adhere to where premises are unoccupied. Where premises are occupied, and a solution cannot be found, the transaction should be delayed.

Telecommunications – guidance has been issued by the Government which states that all property owner and occupier obligations still apply in relation to electronic communication agreements e.g. providing access to sites to inspect, maintain, adjust, repair or upgrade electronic communications equipment.

HMLR ‘interrupted days’ – the Chief Registrar now has the power under new rules to declare certain days as ‘interrupted’ if for reasons of general delay in, or failure of, a communication service or other event or circumstance causing a substantial interruption in the normal operation of the land registry. Any priority periods would be extended by the number of interrupted (working) days.

HMLR now accepting ‘Mercury signings’ – in a significant move from the Land Registry, they have agreed to accept deeds that have been signed using the ‘Mercury signing approach’ from 4 May 2020. Its announcement was as follows: “HM Land Registry will accept deeds that have been signed using the ‘Mercury signing approach’. This means that, for land registration purposes, a signature page will need to be signed in pen and witnessed in person (not by a video call). The signature will then need to be captured, with a scanner or a camera, to produce a PDF, JPEG or other suitable copy of the signed signature page. Each party sends a single email to their conveyancer to which is attached the final agreed copy of the document and the copy of the signed signature page.”