The British Retail Consortium has welcomed the government’s plans to extend the current rent moratorium on commercial properties, including retailers, to protect tenants from eviction to March next year, stating that the move has been made “in the nick of time.”
The Treasury chief secretary Steve Barclay told MPs in the House of Commons yesterday that the current ban on evictions for unpaid commercial rent would be extended past the end of this month, following the delay to easing further Covid-19 restrictions.
The ban, which stops landlords from taking tenants with rent arrears to court, was due to end on June 30 but will now be extended to March 25, 2022.
The plan to extend the moratoriums on the ‘aggressive debt enforcement’ for a further nine months has been welcomed by Helen Dickinson, chief executive of the British Retail Consortium, who said that the government had “addressed an issue of vital importance in the nick of time.”
“We will be looking closely at the details, but welcome the continued support provided by Government to business,” 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. The last 15 months have seen extended periods of forced closure for retailers, preventing many from making the turnover needed to cover rents.
“Retailers need time to trade their way out of debt; this announcement does exactly that. We’re also pleased to see the Government adopt our proposal for binding arbitration where agreements between parties cannot be reached.”
Legislation for a new arbitration system to solve disputes between landlords and commercial tenants affected by the Covid-19 pandemic was also announced.
In his update to the Commons, Barclay said: “In recognition of the importance of jobs in the many affected businesses at the heart of local communities, we launched a call for evidence in April on further actions to take to resolve those debts.
“As a result of that call for evidence, the government now plans to introduce legislation to support the orderly resolution of these debts that have resulted from Covid-19 business closures.
“We will introduce legislation in this parliamentary session to establish a backstop so that where commercial negotiations between tenants and landlords are not successful, tenants and landlords go into binding arbitration.
“Until that legislation is on the statute book existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to March 25, 2022.”
Barclay did however underline that all tenants should start to pay rent again in accordance with the terms of their lease, “or otherwise agreed with their landlord”, as soon as restrictions are removed on their sector, if they are not already doing so.
“We believe this strikes the right balance between protecting landlords and supporting those business that are most in need,” he said.