On 16 June 2021 The Ministry of Housing, Communities & Local Government announced a further extension to the protections available to commercial tenants who are struggling with rent arrears, because they are still closed due to the coronavirus pandemic until 25 March 2022. This means that businesses that have not been able to open and therefore cannot afford to pay their rent are protected against eviction until then. This gives businesses that have not yet been able to open a longer time period in which to reach an agreement with their landlords without facing the threat of eviction.
The Ministry of Justice also confirmed that the restriction on the use of the Commercial Rent Arrears Recovery process by landlords will also be extended.
The new rules to be established are to ringfence COVID-19 commercial rent arrears and guide tenants and landlords to agree repayment plans and measures to protect commercial tenants extended until new rules come into force. Landlords and tenants will be expected to make allowances for this and to work together to reach an agreement over the unpaid rent. This could be by waiving some of the total amount or agreeing a longer term repayment plan. Although legislation is yet to be introduced, it is likely that if agreement cannot be reached an arbitration process will be put in place so that both parties can come to a formal legally binding agreement.
The extension applies to all businesses, but the new measures that will be introduced by primary legislation will only cover those impacted by closures. This mean that rent debt accumulated before March 2020 and after the date when relevant sector restrictions on trading are lifted, will be actionable by landlords as soon as the tenant protection measures are lifted.
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.
Should you have any questions regarding the above, the Dispute Resolution Team would be happy to assist. They can be contacted on 01206 574431 or by e-mail at email@example.com