Extension to ban on evicting commercial and residential tenants

In January 2021, we covered the Government’s extension of the moratorium on enforcing possession orders until 22^nd February 2021.

The Government has now announced further additional support for commercial and residential tenants. This includes a ban on commercial evictions until 30^th June 2021 together with a ban on residential evictions until 31^st May 2021.

The requirement to provide a six-month notice for residential evictions is also extended until 31^st May 2021.

Help where it is needed most

The hospitality and retail sectors have been most affected by the pandemic as they have been forced to cease trading. It is hoped that the above measures will support for business owners, as well as their employees. Figures show 49% of hospitality workers and 36% of retail workers live in rented accommodation.

Communities Secretary. Rt Hon Robert Jenrick said:

“It is right that as we move through the roadmap, we ensure that businesses and renters continue to be supported.”

Business Secretary, Rt Hon Kwasi Kwarteng reiterated the government’s commitment to making sure businesses get the support they need to prepare for reopening and the opportunity to rebuild. 

What about landlords?

However, the Government’s decision to extend the restriction of the use of the Commercial Rent Arrears Recovery (CRAR) process has been met with dismay. Many landlords are struggling with substantial rent arrears and the inability to efficiently recover theses sums.

The British Property Federation has commented that landlord’s inability to collect rent has had the effect of “undermining the UK’s attractiveness” as a country to invest in property, which it believes has the potential to threaten the recovery as lockdown eases.

Although the boss of JD Sports, Peter Cowgill, hit back stating that between 2007 and 2015, landlords were happy to increase commercial rents above inflation reaping the rewards, and now “the boot was on the other foot” they should make concessions.

Best practice

The Government position remains that commercial landlords and tenants should agree their own arrangements for paying or writing off rent debts by 30 June 2020. This is supported by the Government’s code of conduct for negotiations published last year.

However, the Government has signalled that they are prepared to take further steps if voluntary negotiations do not happen. Such measures range from a phased withdrawal of protections, to legislation targeted at those businesses most affected by the pandemic’s restrictions.

Such further steps would likely be part of the review of commercial landlord and tenant legislation later this year. This, will consider a broad range of issues including the Landlord and Tenant Act 1954 Part II, different ways of paying rent, and how Coronavirus has impacted the market.

How Pinney Talfourd can help?

Pinney Talfourd are experts in commercial and residential property litigation and can advise you on changes to the law so you are given up to date advice.

Please do not hesitate to contact either Stephen Eccles on 01708 463202 or Oliver-James Topping on 01708 463227 should you wish to discuss anything further.

This article was written by Oliver-James Topping, Solicitor in our Residential Property Litigation Team. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of March 2021.