Government extends restrictions on commercial evictions

On the 9th of December, the UK government posted an update that business owners affected by the pandemic will continue to be protected from eviction, until the end of March 2021. This has also prompted a review of the legislation surrounding the commercial rental sector.;
Commercial

On the 9th of December, the UK government posted an update that business owners affected by the pandemic will continue to be protected from eviction, until the end of March 2021.

Announcement

The eviction moratorium was originally introduced in March, to protect businesses affected by Covid-19 from eviction and to increase their employee’s job security.

Communities Secretary Robert Jenrick announced:

“I am extending protections from the threat of eviction for businesses unable to pay their rent until March 2021, taking the length of these measures to one year. This will help them recover from the impact of the pandemic and plan for the future.

“This support is for the businesses struggling the most during the pandemic, such as those in hospitality – however, those that are able to pay their rent should do so.”

This is the third and final time that the government intends to extend this ban.

Legislation review

Alongside the extension, it was also announced that there would be a review of commercial tenant legislation.

It is yet unclear which legislation, in particular, is under review.

This is in response to concerns that the framework does not reflect current economic conditions. It is amongst hopes that this assessment will ascertain how to enable improved collaboration, between commercial landlords and tenants.

There is also an emphasis placed on the recovery of high streets and town centres, following on from the pandemic.

Extension on CRAR

There is further guidance promised shortly around rent payment options, where tenants are having difficulty paying.

This ban also restricts the use of Commercial Rent Arrears Recovery (CRAR), until the end of March, unless the amount of arrears goes over the adjusted threshold.

Why extend?

This extension has been implemented with the hopes that the economy will recover more favourably if more businesses are operating when the lockdown restrictions are eased.

The government is keen to point out that tenants are still liable for rent, and should continue to pay if possible. The restrictions are simply limiting a landlord’s ability to collect rent via other means.

Landlords’ response

The reaction of the landlord community is one of concern. There is a belief that some commercial tenants, who can pay rent, are refusing to do so.

Whilst the British Retail Consortium has reported that 80% of retail tenants, in the UK, have reached agreements with their landlords regarding arrears, the same cannot be said to regarding all commercial tenants.

Faced with the difficult situation caused by Covid-19, landlords are having to choose between negotiations or issuing court claims.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.