Eviction Extension

Businesses hardest hit by coronavirus restrictions will continue to be protected from eviction, the Government has announced this week (16 June).

New rules are to be established for businesses that have remained closed during the coronavirus pandemic and are unable to pay rent on their commercial property.

Nightclubs and other hospitality firms are expected to benefit from legislation that will ringfence outstanding unpaid rent arrears for shuttered businesses.

Landlords will be asked to make allowances for the ringfenced rent arrears from these specific periods of closure due to the pandemic and share the financial impact with their tenants.

The legislation will help tenants and landlords work together to come to an agreement on how to handle the money owed.

This could be done by waiving some of the total amount or agreeing a longer-term repayment plan.

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, and they are given the green light to open.

The existing measures in place to protect commercial tenants from eviction will be extended to 25 March 2022.

Statutory demands and winding up petitions will also remain restricted for a further three months to protect companies from creditor enforcement action where their debts relate to the pandemic.

Communities Secretary Robert Jenrick said: “We have provided unprecedented support to businesses to help them through the pandemic.

“However, as we continue to lift restrictions and start to return to business as usual, tenants and landlords should be preparing to pay rent or come to an agreement if they have not done so already.

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

“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.”

Kate Nicholls, CEO of UKHospitality, added: “We welcome these measures as they will banish a grim shadow that has hung over hospitality since the COVID crisis began.

“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.”

Key takeaways:

  • Businesses that are still unable to open due to COVID-19 will be protected from eviction until 25 March 2022
  • A new arbitration process will enable commercial tenants and landlords to resolve rent-related disputes fairly
  • The Government has delayed the end date for all remaining coronavirus restrictions in the UK from 21 June to 19 July
Richard Dawson
Article by Richard Dawson
Share Article