In an expected but delayed decision, the government has announced a three month extension to the commercial property eviction ban until 30th June.
The announcement to extend the lease forfeiture moratorium from the government will leave many landlords disappointed with the news with many having months of unpaid rents due. The eviction ban has left them struggling to reclaim debts and the chief executive of the British Property Federation, Melanie Leech has said “there is a minority where relationships have broken down and become toxic, and the continuation of the moratorium will do nothing to unlock the stalemate and allow the market to re-set and recover.” She did however acknowledge that this was only a minority of tenants behaving in this manner and most tenants were able to find an arrangement that satisfied both parties.
“The government has acknowledged that the majority of tenants and property owners are working well together – with tenants being transparent about their finances, and property owners supporting those in distress with emergency relief and new, longer-term rent payment arrangements. New, stronger relationships have been built through this process.”Melanie Leech, chief executive of the British Property Federation
There was however a positive reaction from the retail and hospitality sectors but both called for further assistance beyond the current eviction ban deadline for commercial property tenants. She stressed that the current date for coming out of restrictions is 21st June meaning the recovery would only just have begun and hoped to work with stakeholders to build a recovery plan together.
This is positive – but it really does need extending to September for hospitality given we will not be out of restrictions until 21 June. We need Govt to take a lead in bringing stakeholders together to map a strategy to tackle rent debt which is threatening recovery https://t.co/G6d5qqogIN— Kate Nicholls (@UKHospKate) March 10, 2021
Likewise, the British Retail Consortium also welcomed the eviction ban being pushed back for their commercial property tenants. Helen Dickinson, their chief executive stated that it provided “much-needed breathing space” and a “vital protection against being pushed into administration by landlords.”
Dickinson did convey her concerns that there would still be a cliff edge once the eviction ban came to an end and other support is withdrawn. She did express the hope that the government, landlords and commercial tenants could work together to avoid eviction from properties and find a new way to build relationships.
Some landlords have made it clear that they feel some of their tenants are refusing to pay not because they lack the means to but as a way of preserving funds. The government insists that the eviction ban should not be used in this manner and that businesses able to pay all or part of rent should do so.
The government has also promised a full review of legislation this summer including the Landlord & Tenant Act 1954 Part II. How they plan to deal with insolvent companies who are being propped up by the lease forfeiture moratorium is unclear with both businesses and landlords seeking more clarity who feel the can is just being kicked down the ever-lengthening road.
Are you a landlord or tenant with a commercial property that is affected by the eviction ban? Alston Asquith has offices in London and Hertfordshire and can arrange a call to provide some initial advice on the steps to take.
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