The government has extended the ban on evicting commercial tenants.
Landlords will not be able to remove tenants until after 31 March next year under an extension announced today.
The moratorium, which was introduced in March and has been extended twice already, prevents property owners from pursuing tenants for unpaid rent by legal means, or from evicting them.
The restriction on landlords using Commercial Rent Arrears Recovery to recover unpaid rent will also extend to the end of March, in line with the moratorium’s expiry date. Measures on restricting statutory demands and winding up petitions have also been extended to March.
“This support is for the businesses struggling the most during the pandemic, such as those in hospitality — however, those that are able to pay their rent should do so,” said Robert Jenrick, the communities secretary.
“We are witnessing a profound adjustment in commercial property. It is critical that landlords and tenants across the country use the coming months to reach agreements on rent wherever possible and enable viable businesses to continue to operate.”
It means that landlords will have been prevented from taking legal action over unpaid rent for a full year.
However, the government has described the decision as a “final extension” on the eviction ban.
Additionally, commercial landlord and tenant legislation will be reviewed, to address concerns that the “outdated” framework does not reflect economic conditions.
This review will begin early next year and explore how to “improve the leasing process to ensure our high streets and town centres thrive as we recover from the pandemic”.
Melanie Leech, chief executive of the British Property Federation, said: “Today the government has confirmed that it is time to plan for the future and give the commercial real estate sector the clarity it needs in order to play its fundamental role in the UK’s recovery from the impacts of Covid-19.
“Ministers have rightly highlighted and commended our sector’s commitment to supporting tenants during what has been an incredibly tough year – and we recognise that those hardest hit will need further support through the winter.
“Any tenant who has not already engaged with its property owners, and is truly struggling, should now come to the table and be transparent about what they can afford.
“Equally this announcement signals the end of the road for those who can pay rent, but have so far refused to. The government has made clear they must now pay their debts.”
Kate Nicholls, chief executive of UKHospitality, said: “If it is to be the final extension to the moratoria, then it is absolutely crucial that it is followed swiftly by a cohesive and comprehensive package of recovery measures from the government. The focus now needs to turn to helping businesses begin to get back towards full strength and trade their way out of danger.
“An extension to the business rates holiday and VAT cut are a must, alongside loans to tenants where landlords have provided rent concessions.
“The government must facilitate a resolution to the problem of rent debt which has built up over a devastating year. The forthcoming enhancements to the code of practice must bring landlords to the table to find a solution. They cannot be allowed to simply wait until April in order to evict and wind-up businesses.”