Businesses that have had to remain closed during the pandemic and are unable to pay rent on their commercial property will continue to be protected from eviction, the government has announced.
In order to give places such as nightclubs and other hospitality businesses the help they need to recover from the pandemic, Communities Secretary Robert Jenrick has announced that legislation will be introduced in this session to ringfence outstanding unpaid rent that has built up when a business has had to remain closed during the pandemic.
The existing measures in place to protect commercial tenants from eviction will be extended to 25th March, 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.
Landlords are expected to make allowances for the ringfenced rent arrears from these specific periods of closure due to the pandemic, and share the financial impact with their tenants.
The legislation will help tenants and landlords work together to come to an agreement on how to handle the money owed. This could be done by waiving some of the total amount or agreeing a longer-term repayment plan.
Support continuing
This agreement should be between the tenant and landlord and, if in some cases, an agreement cannot be made, the law will ensure a binding arbitration process will be put in place so that both parties can come to a formal agreement. This will be a legally binding agreement that both parties must adhere to.
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.
Chief Secretary to the Treasury Steve Barclay said: “We’ve helped businesses and landlords to get through the pandemic with our £350 billion plan for jobs, including the furlough scheme, generous grants and business rate support — and this support is continuing through the summer months.
“We welcome ongoing negotiations between landlords and tenants about accrued rent as we continue to recover from the pandemic. To support these, we’re now providing a new backstop to help businesses and tenants to return to normal. This will help preserve jobs and livelihoods as we build back better.”
Kate Nicholls, chief executive of UKHospitality, said: “We welcome these measures as they will banish a grim shadow that has hung over hospitality since the covid crisis began.
“This legislation will form a strong bedrock for negotiated settlements that can help heal the damage that the pandemic has wrought, and we are pleased that the government has listened to our sector, and acted to ease its plight by bringing in an equitable solution where both landlords and tenants share the pain.”
