Before the coronavirus struck, the options for landlords looking to recover marketable rent arrears were expansive. Depending on the circumstances, you could use the statutory Commercial rent arrears recovery procedure (CRAR), effect penalty by peaceablere-entry or court order, commence debt recovery proceedings, or indeed go down the bankruptcy route and issue a statutory demand followed by a winding up solicitation.
Now, because of temporary rules introduced by the Government to help tenants ride out the Covid storm, the options are more limited.
Still, as Maria Eames, marketable action counsel with Crombie Wilkinson Solicitors explains,‘All isn’t lost for landlords, as the High Court has lately verified that one route for the recovery of arrears is still veritably much open and, in certain circumstances, it can be penetrated through a fast- track process known as summary judgment which will reduce the time to stay for your claim to be dealt with and means you can attack the buildup of arrears fleetly.’
Court decision
In two separate cases, the High Court has ruled that while the use of CRAR, penalty and winding up desires is presently moreover confined or banned under Covid rules, there’s no corresponding bar on the instigation of debt recovery proceedings in respect of rent arrears.
There’s also no bar on the use of the summary judgment procedure in respect of Covid- related rent claims, handed the moneybags you’re seeking are duly owed and it’s clear that
. The tenant has no real prospect of being suitable to successfully defend your claim; and
there are no compelling reasons why the matter should go to a full trial.
The court has also verified that while it’s possible for tenants to advance defences to rent claims relating to Covid confined ages, primarily grounded on arguments around the meaning and effect of insurance and rent cesser vittles and the operation of legal frustration rules, the success of these defences will depend on the circumstances and individual parcel terms.
Commerz Real Investmentgesellschaft mbh v TFS Stores Limited (2021)
In this case, the court was asked to make a summary judgment against a tenant who was being sued for rent arrears of over£ plus interest. The tenant submitted that the case wasn’t suitable for determination via the summary judgment procedure because there was a disagreement as to whether the rent claimed was due. There was also a wider public interest in the matter going to a trial so that the impact of Covid on rent arrears claims could be completely considered.
Bank of New York Mellon (International) Limited v Cine-UK Limited (2021)
In this case, the court was asked to issue summary judgment in respect of three different rent arrears claims which all raised astronomically analogous issues and which were thus dealt with together for the sake of convenience. Still, a notable difference between these cases and the Commerz case is that these landlords had arranged epidemic insurance.
Where does this leave landlords?
The opinions in both cases give a welcome boost for landlords scuffling with tenants who are refusing to pay their rent and who are using defective Covid arguments in support of their position. The court has made it clear that nothing in the Law of Practice has the effect of confining a landlord’s right to sue for recovery of rent if that’s what’s asked and also that arguments around insurance, rent cesser and frustration are only likely to have a prospect of success in cases where they’re supported by the circumstances and parcel terms.
