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Wed 16th Jun 2021 - Government extends moratorium until March 2022 and announces new rules to ringfence rent arrears
Government extends moratorium until March 2022 and announces new rules to ring-fence commercial rent arrears: The government has extended a ban on evictions of commercial property tenants for nine months and announced new rules to ring-fence covid-19 commercial rent arrears. The moratorium, which was introduced in March last year and has been extended four times already, prevents property owners from pursuing tenants for unpaid rent by legal means and from evicting them. The latest extension had been due to expire at the end of this month. Treasury secretary Stephen Barclay said the delay in easing lockdown restrictions, announced on Monday, “presents additional challenges” to business. “Existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to 25 March 2022,” Barclay told the House of Commons. He also announced plans for a binding arbitration scheme to resolve disputes between landlords and commercial tenants. 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 firms most in need. But he 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.” UKHospitality estimates there is currently about £2.5bn in rent arrears built up by hospitality firms during the course of the pandemic. Chief executive Kate Nicholls said: “These measures are wholly welcome and will banish a grim shadow that has hung menacingly over hospitality since the covid crisis began 15 months ago. The legislation will form a strong bedrock for negotiated and fair settlements that can help heal the damage the pandemic has wrought, and is a hugely positive signal the government has been listening to our sector and acted to ease its plight. Thankfully, many landlords and tenants have managed to come to an amicable arrangement over rent arrears, but many could not and the government’s announcement brings in an equitable solution where there is a sharing of the pain. These are unprecedented measures but wholly merited and justified in these unprecedented times, bringing some stability back to an uncertain and unsettled property market. At last, this existential crisis for hospitality looks like reaching a fair conclusion, easing a path to recovery for a sector that can help the national economy back to prosperity.” Real Eating Company managing director Helena Hudson said: “While the delay to the rent moratorium and measures are a positive step for small businesses, it only delays the inevitable unless this time is used to develop a long-term programme that introduces more actions to protect local high streets and small business owners. Without more meaningful government intervention, I believe small businesses across the country face huge risks to their survival before, ultimately, being replaced by larger operators with deeper pockets in 2022. Merely postponing the inevitable does nothing to make our high streets different or unique, works against the interests of consumers due to lack of choice and will, ultimately, lead to less footfall on our high streets. In the short-term, there is a material benefit for small, agile operators like us. We are benefiting from reduced rents, which has opened up opportunities to move into prime, central London locations that were previously completely out of the question. However, in the medium term, small businesses moving out of the high street completely kills what consumers look for when out and about, resulting in a drop in footfall, which is bad news for everybody. The government needs to step in to force everyone to the negotiating table – landlords, business owners and local authorities to keep our high streets alive for the medium and long term.”

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