Rent moratoria further extended into March next year

By James McAllister

- Last updated on GMT

Lease forfeiture and debt enforcement moratoria further extended by Government March 2021 Coronavirus rent arrears

Related tags Rent Rent arrears Coronavirus lockdown Coronavirus tier system Government

The Government has confirmed that the lease forfeiture and debt enforcement moratoria will both be extended until the end of March 2021.

However, it adds that this will be the final extension to the protections, which came into force at the onset of the Covid-19 crisis.

The lease forfeiture moratorium prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the Coronavirus pandemic, while the debt enforcement moratorium restricts landlords from pursuing aggressive forms of rent recovery such as statutory demands and winding-up petitions.

A restriction on landlords using Commercial Rent Arrears Recovery (CRAR) to recover unpaid rent will also automatically extend to the end of March, in line with the moratoria's new expiry date.

"I am extending protections from the threat of eviction for businesses unable to pay their rent until March 2021, taking the length of these measures to one year," said Robert Jenrick, Secretary of State for Housing.

"This will help them recover from the impact of the pandemic and plan for the future.

"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."

The Government is encouraging landlords and tenants still struggling to reach an agreement over rent arrears to continue working towards finding a mutual agreement, with further guidance to support negotiations set to be published shortly.

Alongside this, Jenrick has also announced a review of the outdated commercial landlord and tenant legislation, to address concerns that the current framework does not reflect the current economic conditions.

This review will consider how to enable better collaboration between commercial landlords and tenants and also how to improve the leasing process to ensure our high streets and town centres thrive as we recover from the pandemic and beyond.

Last week UKHospitality warned that a failure to extend the moratoria could have triggered a bloodbath of business failures​ within the sector.

The trade body says there is estimated at around £1.6bn in unsettled rent within hospitality that has accumulated as a result of the Covid crisis, with that number set to increase further as December’s rent quarter payment date (25 December) looms.

Reacting to today's announcement, UKHospitality says an extension to the lease forfeiture and debt enforcement moratoria will help avoid an immediate bloodbath of business failures across hospitality, but warned that it must be accompanied by support to resolve Covid-related rent debt.

The alternative, it adds, is a calamity of evictions on 1 April.

“This is a very welcome respite and it will be crucial in ensuring that more businesses do not fall off an immediate cliff edge," says Kate Nicholls, UKHospitality chief executive.

"Hospitality businesses that have been hammered all year long were staring down the barrel of mass failures and job losses without this.

“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.

“The review of Commercial Property legislation, due to begin in the New Year, must also be delivered at pace. We have been calling for this for a long time and it needs to happen sooner rather than later if we hope to see more businesses benefit from it.”

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