The ban on evicting companies who have failed to pay rent has been extended from its end date of 30 June 2021 to 25 March 2022.
Businesses that have had to remain closed due to the Covid-19 pandemic and are therefore unable to pay rent on their commercial property will remain protected for a further 9 months.
The Government has reiterated that commercial landlords and tenants need to be communicating to enable rent issues to be properly managed. They have also repeated that tenants who can pay, should do so.
The Government also announced that legislation will be introduced to ringfence outstanding unpaid rent where a business has had to remain closed during the pandemic. Landlords are expected to make allowances for the ringfenced rent arrears from these periods of closure and share the financial impact with their tenants. This should encourage tenants and landlords to work together to decide on an agreement on how to deal with the money owed.
If an agreement is not made, then a compulsory arbitration procedure will occur. This is to give peace of mind that the debt will be settled fairly and completely.
The government also announced that the temporary ban on using winding-up petitions, where the inability to pay is caused by Covid-19, has been extended for a further three months to the end of September 2021. This is unless there are reasonable grounds to believe that the Covid-19 pandemic has not had a financial impact on the company or that the circumstances for the winding up petition would have happened regardless of Covid-19.
The Government’s announcement summary:
- The forfeiture moratorium is to be extended from 30 June 2021 to 25 March 2022
- Commercial Rent Arrears Recovery can only be used where tenants owe at least 544 days rent
- The temporary ban on the use of winding up petitions where the debt has been caused by Covid-19 has been extended until 30 September 2021.
If you would like to discuss any points in this article further or are looking for legal advice relating to rent arrears, please contact Spire Solicitors LLP on 01603 677077.
