In a move that has surprised many in the real estate industry, the government has announced a further nine month extension to the moratorium on the forfeiture of commercial leases, to 25 March 2022.
In its announcement on 16 June 2021, it also extended the restrictions on a landlord’s ability to recover rental arrears through the seizure of goods under Commercial Rent Arrears Recovery (CRAR), also until 25 March 2022. There will also be an extension to the restriction on the use of statutory demands and winding up petitions, until 30 September 2021.
Government consultation on lifting commercial rent restrictions
The results of the government’s previous call on the real estate industry for evidence on commercial tenancies is yet to be published and is expected imminently. Additionally, the recent government announcement has also provided an overview on how new legislation to assist commercial landlords and tenants in dealing with historic Covid-19 related rent arrears will operate. Arrears relating to pandemic closures are ring fenced, with landlords and tenants expected to share the impact of the unpaid rent subject to a binding arbitration process. Draft legislation is however yet to be published.
Whilst tenants will no doubt appreciate the breathing space afforded by these new measures, particularly those operating in the hard hit hospitality, entertainment and leisure sectors, landlords with their own debt facilities to service will have fresh cause for concern. Both landlords and tenants keenly await details of the legislative solution proposed by the government.
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