Pandemic eviction protection for businesses extended until 2022

Businesses that have been unable to open due to pandemic restrictions and been unable to pay rent on commercial property will have protection from eviction until March 2022, Communities Secretary, Robert Jenrick, has announced

The Prime Minister announced on Monday that coronavirus restrictions would continue until July 19th; however, during that media briefing, Boris Johnson stated that business support measures would not be extended also.

In order to support businesses which remain closed, such as nightclubs, and hospitality businesses that have been most affected by restrictions, new legislation will be introduced to ringfence outstanding unpaid rent built up during the pandemic. The law will also ensure a binding arbitration process will be put in place so that both commercial landlords and tenants can reach a formal, binding agreement. An existing moratorium on commercial evictions, due to end on 30th June, will be extended until 25th March 2022 to allow agreements to come into effect without threat of eviction.

Statutory demands and winding up petitions will also remain restricted for a further three months to protect businesses with pandemic-related debts.

Communities Secretary Robert Jenrick said:

We have provided unprecedented support to businesses to help them through the pandemic. However, as we continue to lift restrictions and start to return to business as usual, tenants and landlords should be preparing to pay rent or come to an agreement if they have not done so already.

“This special scheme reflects the unprecedented nature of the pandemic and responds to the unique challenges faced by some businesses. It strikes the right balance between protecting landlords while also helping businesses most in need, so they are able to reopen when it is safe to do so.

“They will ensure many viable businesses can continue to operate and debts accrued as a result of the pandemic are resolved to mutual benefit swiftly. The government has committed £350 billion to keep businesses running, people in jobs and ensure we can build back better from the pandemic.”

The hospitality sector has largely welcomed the extension of eviction protection beyond the pandemic. Kate Nicholls, CEO of UK Hospitality, said:

We welcome these measures as they will banish a grim shadow that has hung over hospitality since the Covid crisis began. This legislation will form a strong bedrock for negotiated settlements that can help heal the damage that the pandemic has wrought, and we are pleased that the government has listened to our sector, and acted to ease its plight by bringing in an equitable solution where both landlords and tenants share the pain.”

Organisations representing commercial landlords however have been critical of the proposed legislation. British Property Federation Chief Executive, Melanie Leech, commented that the majority of landlords had already reached agreements with tenants on rent where businesses had been affected by closures, adding:

Another blanket extension to the moratoriums will provide further opportunity for those well-capitalised businesses who can afford to pay rent, but are refusing to do so, to continue their abuse of government and property owners’ support and will cast a long shadow over future investment to build back better.”