Landlords blocked from evicting small businesses for another three months

Government extension on not allowing commercial landlords to repossess independent shops, bars and restaurants comes as huge relief to small businesses

The Government has blocked commercial landlords from evicting small businesses from shops and other premises for another three months until June 30 2021.

This moratorium was introduced in March last year and has already been extended three times.

It’s part of a package from the Chancellor to extend business support until June. On February 22, Boris Johnson announced his Covid-19 roadmap. The plan is for shops to open mid-April and hospitality would be up and running by the end of June.

The Government wants to see small business tenants and commercial landlords agree arrangements for paying or writing off rent debts by June 30. A code of conduct was published by the Government last year, setting out best practice for negotiations.

But the Government warned that if negotiations as a whole break down and there’s a significant risk to jobs, then it would be prepared to take further action.

However, the Financial Times reported a warning from UKHospitality that 40 per cent of hospitality operators had not yet reached a reduction or deferral agreement on their rent.

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

The British Property Federation estimates total unpaid rent for UK rent for commercial property from the end of March until December came to £4.5bn.

A portion of this is from larger businesses such as Boots, H&M and JD Sports.

David Wadsworth, partner at JMW Solicitors, said: “Smaller landlords would not try to evict the bigger chains for non-payment of rent in circumstances where there is no better tenant to replace them, thus leaving potential voids and business rates liabilities to pay for.

“Large retailers, especially supermarkets, have also been criticised for claiming business rates relief even where they have seen increased profits and done the best of all sectors since the first lockdown in March 2020. A better and fairer approach would surely be to base any new rules based on a different method entirely, such as the methods used with the Business Interruption Loan Scheme, which is based on turnover.

“Preventing smaller but viable businesses from being evicted at this point in time is a laudable objective; allowing larger businesses to ‘game’ the system should have been stamped on by the government already.”

Further reading

Commercial landlords banned from using aggressive rent collection tactics