9-month extension to the commercial eviction ban

Despite the Government's announcement in March 2021 being described as a "final extension" to the moratorium on forfeiture of commercial leases for non-payment of rent, the government has announced that the existing measures will be extended for a further 9 months to 25 March 2022.

What's the issue?

The restrictions on using Commercial Rent Arrears Recovery (CRAR) will also be extended to March 2022. However,  the service of statutory demands and issuing of winding up petitions will be restricted for a further three months to 30 September 2021.

Communities Secretary Robert Jenrick has announced that new legislation will be introduced to ringfence outstanding unpaid rent that has built up while businesses have remained 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. Tenants will be, however, expected to start paying rent "as soon as restrictions change, and they are given the green light to open". 

A formal dispute resolution process will be introduced through a binding arbitration where parties cannot reach an agreement.  

The announcement confirms that whist the extension applies to all businesses, the new measures that will be introduced will only cover those impacted by closures – appearing to cover the hospitality sector. This means that 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.

What next?

Following the government's announcement on Monday that the current Coronavirus restrictions are to continue until at least 19 July 2021, further measures were perhaps unavoidable as a means to protect the future of commercial businesses. However, concerns as to how tenants will deal with mounting COVID liabilities continue to loom. 

Further detail on the new legislation is expected to follow - watch this space!