PrimeChoice - Property Management and Lettings

Eviction ban extended

17 June 2021

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*Original article can be found here: https://propertyindustryeye.com/eviction-ban-extended/

The ban, which stops landlords taking tenants to court for non-payment, was due to end on 30 June, but has now been extended until March 2022 in the wake of Monday’s decision to push back so-called freedom day to 19 July.

Treasury secretary Stephen Barclay said the delay in easing lockdown restrictions, announced on Monday, “present additional challenges” to business.

It is estimated that firms in retail and hospitality are £5bn in rent debt.

The moratorium of commercial evictions was first announced in April last year, and was initially designed to help struggling businesses through to September 2020.

While retailers and hospitality firms welcomed the decision to extend the ban, landlords voiced dismay and again warned that some profitable tenants were abusing the ban to avoid paying rent they can afford.

Barclay said: “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.”

According to business secretary Kwasi Kwarteng, sorting out commercial rent debts will be supported by a new binding arbitration system.

He said: “The new arbitration process will be underpinned by law, providing commercial tenants and landlords with peace of mind that covid-related rent debts will be settled fairly, and with finality.”

However, the government has so far not announced plans to introduce a similar mandatory arbitration to settle disputes between landlords and tenants in the residential sector.

Communities Secretary Robert Jenrick commented: “We have provided unprecedented support to businesses to help them through the pandemic. However, as we continue to lift restrictions and start to return to business as usual, tenants and landlords should be preparing to pay rent or come to an agreement if they have not done so already.

“This special scheme reflects the unprecedented nature of the pandemic and responds to the unique challenges faced by some businesses. It strikes the right balance between protecting landlords while also helping businesses most in need, so they are able to reopen when it is safe to do so.”