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Government extends the moratorium preventing the eviction of commercial tenants until 25 March 2022

Stephen Barclay, the Chief Secretary to the Treasury, has announced an extension to the moratorium preventing the eviction of commercial tenants for non-payment of rent.

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The moratorium, which was due to be lifted on 30 June 2021, shall now remain in place until 25 March 2022 (some two years after it was introduced in April 2020). This is important news for commercial landlords to be aware of, and good news for tenants.

In addition, the government will also extend the restrictions on (i) landlords using Commercial Rents Arrears Recovery to enforce unpaid rent on commercial leases; and (ii) statutory demands and winding-up petitions.

The announcement from Communities Secretary Robert Jenrick most significantly states that additional primary legislation will be introduced in this parliamentary session to ringfence outstanding unpaid rent that has built up when a business has had to remain closed during the pandemic. Landlords and tenants will be required to come to an agreement on the treatment of the arrears, for example, waiving some of the amount due or agreeing a longer-term repayment plan. If agreement cannot be reached, a binding arbitration process will be put in place that ensures a legally binding agreement is made to which both parties must adhere.

The continued extension will, no doubt, be a source of relief to struggling tenants, although the news is likely to frustrate many commercial landlords, many of which have not received rent for several months. In an attempt to protect landlords, the Government has made it clear that any business which is able to pay rent, must do so. Although, how the Government proposes to enforce this is currently unknown.

In the meantime, Landlords and tenants will need to continue to work proactively together to find ways to restructure and, hopefully, meet both parties’ financial needs.

More information is available on the Government website: www.gov.uk/government/news/eviction-protection-extended-for-businesses-most-in-need

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