Government has extended the current rent moratorium on commercial properties to protect tenants from eviction to March 2022.
Just as retailers feared a wave of legal action by landlords, the government has taken steps to give both landlords and tenants more time to negotiate. Treasury chief secretary Steve Barclay has announced that the current ban on evictions for unpaid commercial rent would be extended past the end of this month, following the delay to easing Covid-19 restrictions.
The ban, which stops landlords from taking tenants with rent arrears to court, was due to end on June 30th but will now be extended to March 25th, 2022. The government also plans to introduce legislation for a new arbitration system to solve disputes between landlords and commercial tenants affected by the Covid-19 pandemic.
The Treasury believes the adaptations to the rent moratorium strike a balance between protecting landlords and supporting business in need.
Steve Barclay said: “In recognition of the importance of jobs in the many affected businesses at the heart of local communities, we launched a call for evidence in April on further actions to take to resolve those debts. As a result of that call for evidence, the government now plans to introduce legislation to support the orderly resolution of these debts that have resulted from Covid-19 business closures. Until that legislation is on the statute book existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to March 25th, 2022.”
The Treasury confirmed that tenants should start to pay rent again in accordance with the terms of their lease, or as otherwise agreed with their landlord, as soon as restrictions are removed on their sector if they are not already doing so.
British Retail Consortium chief executive Helen Dickinson commented: “This is a very welcome announcement, addressing an issue of vital importance in the nick of time. We will be looking closely at the details, but welcome the continued support provided by government to businesses.”
Noting that the last 15 months have seen extended periods of forced closure for retailers, preventing many from making enough turnover to cover rents, Helen added: “Retailers need time to trade their way out of debt; this announcement does exactly that. We’re also pleased to see the government adopt our proposal for binding arbitration where agreements between parties cannot be reached.”
However, the government is not expected to extend the current furlough scheme following the delay, and shadow chancellor Rachel Reeves has cautioned that this latest announcement does not go far enough to support struggling businesses.
