On 10 March 2021, Robert Jenrick, the Housing Secretary released a press release with a number of important ramifications for landlord and tenants writes Paul Henson, real estate disputes partner.
Mr Jenrick announced that the “ban” on commercial evictions will be extended for a further three months. In legal speak, we take this to mean that the moratorium on commercial forfeiture relating to rent arrears will be extended to 30 June 2021 requiring a further amendment to section 82 of the Coronavirus Act 2020. By way of reminder, this restriction was first introduced on 23 March 2020 and was originally to remain in place until 30 June 2020 but has now been extended for a full year from its original date of expiry.
This restriction only prevents a landlord from seeking to forfeit a “relevant business tenancy” in relation to arrears of rent or other sums that the tenant is liable to pay and does not include forfeiture for other breaches of a tenancy. It also does not cover licences or tenancies at will. Furthermore, despite this temporary ban it should be noted that rent will continue to accrue during the period together with interest. There is also further restriction on the use of Commercial Rent Arrears Recovery (“CRAR”) by landlords in that the total number of days’ outstanding rent that is required has now increased to 554 days.
The government have also provided additional safeguards for residential tenants by extending the need for landlords to provide six month notice periods to tenants (in relation to both section 21 and
section 8 Housing Act 1988 notices) until 31 May and has further banned bailiff-enforced evictions until that same date.
The sting in the tail?
At the time of writing there has been no detail provided but the press release also mentioned the government’s intention to launch a review of commercial landlord and tenant legislation later this year where it: “will consider a broad range of issues including the Landlord & Tenant Act 1954 Part II, different models of rent payment and the impact of Coronavirus on the marketplace”.
The property market will no doubt await that review with considerable interest. In the meantime, the government also launched a call for evidence to help monitor the negotiations between landlords and tenants which they state will inform what they may do after 30 June when commercial businesses that are closed (particularly in the leisure and hospitality sectors) will have reopened under the current roadmap to exiting Coronavirus restrictions. The government said it would welcome a broad range of feedback and so landlords and tenants alike would be well advised to keep an eye on this to ensure their voices are heard.