10/12/2020

The government has announced that the protection offered to business owners who cannot pay their rent as a result of the pandemic is to be extended.

The protections from forfeiture for non-payment of rent are to be extended to the end of March 2021 – one year since their introduction.

The move will be welcomed by those businesses hardest hit by COVID restrictions, especially the hospitality industry. Although, for landlords, it spells reduced rental income and, for some, prolonged cash flow problems.

In addition, the restriction on landlords using Commercial Rent Arrears Recovery to recover unpaid rent will extend to the end of March, allowing businesses breathing space to pay rent owed.

Communities Secretary Robert Jenrick also announced a review of commercial landlord and tenant legislation in a bid to ensure the legislation reflects the current economic conditions.

The review will look at how to enable better collaboration between commercial landlords and tenants, alongside improvements to the leasing process to support the high street and town centres through a period of post-pandemic recovery.

In his statement, Mr Jenrick described a ‘profound adjustment in commercial property’ and urged landlords and tenants to use the next three months to reach agreements on rent where possible to enable businesses to remain viable.

There is still much uncertainty ahead, but the extension of the protections from forfeiture of non -payment of rent should provide welcome relief to businesses who will no longer have the threat of eviction hanging over them.

It is worth noting that the right to forfeiture is simply postponed, which means that landlords will be able to begin proceedings or take debt enforcement action once the moratorium is lifted, so it is crucial that struggling businesses open negotiations with their landlords sooner, rather than later.

For advice on any commercial property matter, phone 01782 205000 or email kate.pritchard@beswicks.com