UK commercial eviction ban to be extended again
Struggling UK retailers can breathe a sigh of relief. The government is to extend the ban on commercial evictions until March 2022.
On Wednesday, ministers were told the moratorium for business tenants will not expire at the end of June as planned. The moratorium was introduced in April 2020 to help struggling businesses through the pandemic.
Meanwhile, restrictions on landlords using laws permitting them to recover rent arrears by selling a tenant's goods will also be continued.
The decision comes two days after prime minister Boris Johnson was forced to announce an extension of the current lockdown restrictions to 19 July.
Steve Barclay, chief secretary to the Treasury, announced the extension during a statement on the economy in the House of Commons.
He said existing debts accumulated during the crisis will be “ringfenced” in order to protect struggling tenants. A new arbitration mechanism will be introduced to help tenants and landlords resolve disputes over those bad debts.
Retail and hospitality industry groups warned last week that the two sectors had built up £5 billion in rent arrears while many businesses are still operating well below pre-pandemic levels.
But some landlords have raised concerns that the moratorium has allowed some businesses to escape paying rent despite still making profits.
Barclay told the Commons the government had called for evidence on further actions to resolve companies’ debts “in recognition of the importance of jobs in the many affected businesses at the heart of local communities”.
The government plans to introduce legislation to support “orderly resolution” of debts that have resulted from Covid-19 business closures.
“We will introduce legislation in this parliamentary session to establish a backstop so that where commercial negotiations between tenants and landlords are not successful, tenants and landlords go into binding arbitration”, Barclay said.
“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 25 March 2022”, he confirmed.
However, Shelley Sandzer, a partner at Duncan Lillie professional services, said of the announcement: “The government’s decision to extend the moratorium until March 25 next year is anything but helpful.
“It not only defers the problem to another day, it actually makes the position worse for those landlords and operators that have yet to reach an agreement”.
“She added: “Now more than ever, landlords and tenants need to engage in meaningful discussions if they have not already done so as they are clearly not going to get any help from the government.
“Collaboration, co-operation and communication, the three tenets we proposed 12 months ago, remain key to reaching balanced outcomes that are as a close to a win-win for all parties as possible”.
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