Landlords blocked from evicting small businesses for another nine months

Government blocks landlords from evicting small businesses for non payment of rent due to Covid-19 until March 2022

The government has blocked commercial landlords from evicting small businesses from shops and other premises for another nine months until March 25 2022.

This is to ensure that the sectors who are unable to open have enough time to come to an agreement with their landlord without the threat of eviction.

The moratorium was introduced in March 2020 and has already been extended four times. It was due to wrap up at the end of June 2021.

>See also: How to ask for a commercial rent freeze from your landlord

New legislation for outstanding business rent

Community secretary Robert Jenrick has announced that legislation will be introduced to ringfence outstanding business rent that has had to build up when a business had to remain closed. Landlords are expected to make allowances for the ringfenced rent arrears from these specific periods of closure during the pandemic, sharing the financial impact with their tenants.

The legislation will help tenants and landlords come to an agreement on how to handle the money owed. This could be done by waiving some of the total amount or agreeing to a long-term repayment plan.

This agreement should be made between tenant and landlord and in some cases, if an agreement can’t be reached, then the law will ensure a binding arbitration process will be put in place for both parties to make a formal agreement that they both need to honour.

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.

Communities secretary, Robert Jenrick, said: “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.

“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.”

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.

It’s welcome news for hospitality and retail, who are in an estimated £5bn of rent debt.

British Independent Retailers Association (Bira) CEO Andrew Goodacre said: “The extension to the rent moratorium and the ring-fencing of debt is another campaigning success for Bira.

“It is obvious that retailers with rent debt incurred during the closure periods need further protection and more time as they look to re-build their businesses.

“Whilst the extension is good news, we still await some important details to fully brief our members. We are keen to ensure that there are no loopholes for landlords to exploit.

“Finally, our message to retailers is that it is vital that rent is paid if you are trading. Any debt incurred whilst open will not be protected so it is important for retailers and landlords to sit down and find a practical solution to addressing the debt.”

Further reading

Commercial landlords banned from using aggressive rent collection tactics

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Tim Adler

Tim Adler is group editor of Small Business, Growth Business and Information Age. He is a former commissioning editor at the Daily Telegraph, who has written for the Financial Times, The Times and the...