Covid-19 restrictions

Eviction protection extended for businesses that have had to remain closed during pandemic



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Businesses that have had to remain closed during the pandemic and are unable to pay rent on their commercial property will continue to be protected from eviction until 25th March 2022, the government has announced.

The government introduced legislation last year to prevent landlords of commercial properties from being able to evict tenants for not paying rent.

This measure will now be in place until 25th March 2022, alongside the restrictions on landlords’ abilities to recover rental arrears through the seizure of goods.

In order to give places such as nightclubs and other hospitality businesses the help they need to recover from the pandemic, communities secretary Robert Jenrick has revealed that legislation will be introduced to ringfence outstanding unpaid rent that has built up when a business has had to remain closed during the pandemic.

Landlords are expected to make allowances for the ringfenced rent arrears from these specific periods of closure and share the financial impact with their tenants.

The legislation aims to help tenants and landlords work together to come to an agreement on how to handle the money owed, which could be done by waiving part of the total amount or agreeing a longer-term repayment plan.

If an agreement cannot be made, the law will ensure a binding arbitration process will be put in place so that both parties can come to a formal agreement.

In order to ensure landlords are protected, the government is making clear that businesses who are able to pay rent, must do so.

Tenants should start paying their rent as soon as restrictions change.

“This special scheme reflects the unprecedented nature of the pandemic and responds to the unique challenges faced by some businesses,” said Jenrick.

“It strikes the right balance between protecting landlords while also helping businesses most in need, so they are able to reopen when it is safe to do so.

“They will ensure many viable businesses can continue to operate, and debts accrued as a result of the pandemic are resolved to mutual benefit swiftly.

“The government has committed £350bn to keep businesses running and people in jobs, and ensure we can build back better from the pandemic.”

Business secretary, Kwasi Kwarteng, added that extending the ban on commercial evictions was a “necessary measure” to help businesses through the final stages of the pandemic.

The announcement follows a call for evidence which sought views from a range of stakeholders.

“We welcome these measures as they will banish a grim shadow that has hung over hospitality since the Covid crisis began,” commented Kate Nicholls, UKHospitality’s CEO.

“This legislation will form a strong bedrock for negotiated settlements that can help heal the damage that the pandemic has wrought, and we are pleased that the government has listened to our sector and acted to ease its plight by bringing in an equitable solution where both landlords and tenants share the pain.”

Andrew Teacher, former spokesman for the BPF and founder of Blackstock Consulting, said that the extension will not make the financial pain for businesses disappear, “it simply kicks the can down the road”.

“Any sane landlord wouldn’t want to kick out a tenant with a functional business and risk the pain of paying empty rates on a vacant building.

“But the government cannot continue to put its fingers in its ears over the real damage this does to the property industry and the knock-on effect ongoing uncertainty poses to banks and institutions.”

Rent debt accumulated before March 2020 and after the date when relevant sector restrictions on trading are lifted will be actionable by landlords as soon as the tenant protection measures are lifted.

A government response to the call for evidence on commercial tenancies will be published in due course.

The review of commercial landlord and tenant legislation will also be launched later this year.

 

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