Government set to extend commercial rent protections

According to the Financial Times​​, Government officials are currently examining how to prolong the existing ban on evictions of commercial property tenants by landlords from its current expiry date of September 30. 

One official told the paper that an announcement on extending the moratorium, which was introduced in March and prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the Coronavirus pandemic, could come as early as this week.

News of the extension will come as a relief to business owners from across the hospitality sector.

Yesterday it was reported that trade body UKHospitality wrote to both the Chancellor of the Exchequer Rishi Sunak and the Secretary of State for Housing, Communities and Local Government Robert Jenrick, warning that a failure to take action over rents will trigger a 'bloodbath' of businesses failures across the sector​ with thousands more jobs lost.

It said that many landlords have already made it clear they intend to use the end of the moratorium to issue winding-up petitions to tenants, both large high-street chains and individual businesses, and that unless the protection is extended various businesses will face eviction and other enforcement activity.

Following the forthcoming quarterly rent payment date on 29 September, the level of unsettled rent from this period within the hospitality sector will reach an estimated £1.06bn according to the trade body, which is 'mostly held' by 'otherwise viable businesses' that are not able to pick up the rent bill due to the almost total elimination of revenue during the second quarter as a result of the Coronavirus lockdown, and the slow return to business since restrictions began to lift in July.

The letter calls on the Government calls on the Government to extend the moratorium until 31st March 2021; ensure County Court judgements are prohibited for rent debt; and work with landlord and tenant bodies on levers to encourage negotiations such as through mandatory rent reviews where landlords are not negotiating

In contrast, property trade associations have argued a moratorium on business evictions must come to an end.

Melanie Leech, chief executive of the British Property Federation said: “Responsible property owners do no want empty stores - they want thriving businesses and communities, and they will continue to support businesses in genuine distress as a result of Covid-19.

“The moratorium, however, must come to an end as well-financed businesses have been exploiting the government intervention to avoid paying rent, when they are indeed able to pay, and this puts at risk our sector’s ability to support vulnerable tenants.

"For many, extending the moratorium will simply mean growing the volume of rent arrears, and this debt is already at unsustainable levels.”

The FT ​says that the Government 'declined to comment' on the perspective extension of the moratorium.