Eviction ban on firms behind on rent is extended by nine months

A ban on landlords evicting firms for unpaid commercial rent is being extended for another nine months.

The ban, which stops landlords taking tenants to court for non-payment, was due to end on 30 June.

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.

"Existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to March 25, 2022," Mr Barclay told the Commons.

He also announced plans for a binding arbitration scheme to resolve disputes between landlords and commercial tenants. Mr Barclay said the scheme should be in place for when the eviction ban is lifted.

He said the measures "strike the right balance" between protecting landlords and supporting businesses most in need.

But Mr Barclay added: "To be clear, all tenants should start to pay rent again in accordance with the terms of their lease or as otherwise agreed with their landlord as soon as restrictions are removed on their sector if they are not already doing so."

Thousands of companies, especially in the hospitality sector, are still unable to trade normally, among them nightclubs and leisure firms.

In April last year the government blocked legal attempts to evict shops, restaurants and other businesses that had stopped paying rent, as part of emergency measures to soften the economic impact of the pandemic.

Hospitality leaders had called for an extension of the moratorium and for more financial support from the government.

On Monday, Prime Minister Boris Johnson said plans to remove remaining pandemic restrictions on 21 June have been pushed back to 19 July amid concerns over the spread of the Delta variant, which was first identified in India.

'Nick of time'

Last week, the chief executives of trade groups UK Hospitality and British Retail Consortium (BRC) told MPs that both sectors have accrued a combined £5bn in rent debt.

Data for the first quarter of 2021 shows that only 74% of rent was collected by landlords 60 days following the end of the period after tenants were battered by the pandemic.

Hospitality, leisure and retail operators have also benefited from a business rates holiday since the start of the crisis.

Helen Dickinson, chief executive of the British Retail Consortium, many of whose members have felt lockdown most acutely, said the extension comes "in the nick of time".

She said: "Just as retailers feared a wave of legal action by landlords, the government has stepped in to offer both landlords and tenants more time to negotiate. Retailers need time to trade their way out of debt; this announcement does exactly that."

The Institute of Directors (IoD) also said firms across the country would welcome the extension, but the Treasury could have gone further.

Dr Roger Barker, the IoD's director of policy, said: "This is only one element of the cliff edge that we have been calling on government to address.

"At the end of this month businesses will still face the tapering off of furlough and business rates relief, and the suspension of wrongful trading liability. The government must hold its nerve and push out its business support measures until the job is properly done."

Posted on Jun 16, 2021.

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