Lease forfeiture moratorium extended

The government has extended the ban on commercial evictions for a further three months, bringing another degree of comfort to restaurants struggling to see through Covid-19 closures. 

With outdoor trading beginning from 12 April, the decision aims to help venues get back to business when doors fully reopen for hospitality no earlier than 17 May. 

The government’s current position is to support commercial landlords and tenants to agree their own arrangements for paying or writing off rent debts by 30 June. However, if these discussions do not happen and there remains a significant risk to jobs, the government has said it is prepared to take further steps.

Calls for evidence

As a result, it has launched a call for evidence on commercial rents to help monitor the overall progress of negotiations between tenants and landlords. This will also set out potential steps that government could take after 30 June, ranging from a phased withdrawal of current protections, to legislative options targeted at those businesses most impacted by Covid-19. 

"It is encouraging to see the government issuing a call for evidence on the possibility of additional measures to solve the rent crisis," says UKHospitality chief executive Kate Nicholls. 

"Rent debt has spiralled to unmanageable levels for too many businesses through no fault of their own. We have reached an impasse that threatens the survival of many businesses right at the moment that they are looking to reopen and rebuild."

The review of commercial landlord and tenant legislation will be launched later this year and will consider a broad range of issues including the Landlord & Tenant Act 1954 Part II, different models of rent payment, and the impact of Covid-19 on the market.

The Ministry of Justice will also lay a Statutory Instrument to extend the restriction on the use of the Commercial Rent Arrears Recovery (CRAR) process by landlords. This measure will increase the total number of days’ outstanding rent required for CRAR to be used to 457 days’ between 25 March and 23 June, and 554 days’ between the 24 and 30 June.

This measure aims to continue to provide protection to tenants of commercial leases with rent arrears accumulated during the coronavirus period, while protections from forfeiture for business tenancies are in place under the Coronavirus Act 2020.

“The government’s suggestion of a phased approach and targeted legislation could provide the flexibility combined with incentive our businesses need," adds Nicholls. "We hope that this motivates landlords to come to the table with meaningful concessions.

"Refusal to do so would force the government to go down the legislative route, which would cause greater delays and trigger further business closures, even upon reopening, due to unsustainable levels of debt with no end in sight."