Real Estate Bulletin – September 2021

Government announces restrictions on winding up petitions to continue in relation to commercial rent arrears built up during the pandemic

On 9 September 2021 the Insolvency Service issued a press release entitled 'End of temporary insolvency measures'. However, the headline will disappoint those commercial landlords who were hoping to add winding up petitions back to their list of enforcement options for commercial rent arrears.

The press release confirms that restrictions placed on creditors during the pandemic will expire. However, targeted restrictions will continue for commercial landlords in relation to presenting winding up petitions against limited companies to repay commercial rent arrears built up during the pandemic.

While reiterating the message that businesses should pay contractual rents where they are able to do so, the press release states that "continuing the restriction on winding up, in respect of commercial rent only, supports the announcement on 16 June that commercial tenants will continue to be protected from eviction until 31 March 2022, whilst the government implements a rent arbitration scheme to deal with commercial rent debts accrued during the pandemic." Other narrower restrictions, which are said to be targeted measures to support small businesses, have also been introduced.

The legislation enacting these measures takes effect on 1 October 2021 and is set to end on 31 March 2022. In summary:

• commercial landlords will not be able to present a winding up petition in respect of "rent, or any sum or other payment that a tenant is liable to pay" under a business tenancy and "which is unpaid by reason of a financial effect of coronavirus";
• a winding up petition can only be presented in respect of a debt or debts totalling £10,000 or more; and
• before a creditor presents a winding up petition, notice must be served on the company setting out details of the debt, seeking the company's proposals for the payment of the debt and stating that if no proposal to the creditor's satisfaction is made within 21 days of the date of the notice, the creditor intends to present a petition to the court for the winding-up of the company. However, a creditor may apply to Court to disapply this notice requirement or to shorten the 21-day response period.

The explanatory note accompanying the legislation states: "It is recognised that these temporary measures are a significant intervention into the normal working of insolvency law, in particular the rights of creditors, therefore the Government will keep these temporary measures under constant review whilst they remain in force".

Residential property developer tax: draft legislation

The government has published draft legislation for the proposed new tax on developers of UK residential property. The government intends to target the tax at companies or corporate groups undertaking UK residential property development activities generating profits in excess of a group-wide annual allowance. The new tax is intended to apply from 1 April 2022 and to last for a time-limited lifespan of around 10 years.

The final design of the tax will be announced as part of the Autumn Budget on 27 October. The tax rate and threshold allowance, which still remain to be confirmed, are expected to form part of that announcement.

Please click here for more detailed analysis.

The Building Safety Bill for Real Estate Investors and Developers

The Building Safety Bill is one of most significant pieces of construction industry legislation to emerge in the last 20 years.

As it makes its way through parliament, join us to discuss key aspects of the Bill and its implications for new developments.

Our panel:

• Martin Taylor, Director of Regulatory Policy, Local Authority Building Control
• Emily Monastiriotis, Partner, Simmons & Simmons
• Steven Kaye, Managing Associate, Simmons & Simmons
• Deian Rhys, Partner, Simmons & Simmons

Where and when?

Date: 6 October 2021

Time: 9-10am BST

Location: Zoom

> Register here

Retained EU Law - Removal and Review?

Lord Frost's recent statement on a forthcoming review of retained EU law is likely to have far-reaching consequences for those advising on English law.

Read more here.