On 10 March 2021, the government announced a further extension to the current residential and commercial eviction ban, which was due to expire on 31 March 2021.
Business owners, many of whom have had to cease trading entirely during the lockdown, are being given extra support with the government extending the ban on commercial evictions for a further three months to 30 June 2021. The decision is designed to help those worst affected by the pandemic, such as bars and restaurants, get back to business when doors fully reopen for hospitality.
Residential tenants will also be supported as the ban on bailiff-enforced evictions in all but the most serious circumstances – such as incidents of fraud or domestic abuse – and the requirement for landlords to provide six-month notice periods to tenants before they evict will also be extended until at least 31 May 2021. This will ensure residents in both the private and social sector can stay in their homes and have enough time to find alternative accommodation or support.
Effects of measures
- The full statement outlined by the government is to support and encourage residential and commercial landlord and tenants to agree their own arrangements for paying or writing off debts.
- Unpaid rents are effectively being deferred, which will mean an increase in tenant debts. Interest on arrears (where payable under a lease) will also accrue – so this could be a problem postponed to a future date.
- Commercial Rent Arrears Recovery (CRAR) action will be extended. This continues to protect tenants with rent arrears accumulated during the coronavirus period, while protections from forfeiture are in place under the Coronavirus Act 2020.
- There will be an immediate impact on landlords’ income and cash flow position in the short term, which could negatively impact their own businesses.
- Landlords’ remedies are still restricted, with the announcement making no mention of the moratorium on statutory demands and winding-up petitions. Currently, landlords will only be able to rely on rent deposits/bank guarantees, claims against former tenants/guarantors, or issuing a debt claim through the lower courts.
- Court arrangements and rules will be extended to the end of July 2021, with the continuation of priority being given to the most serious cases. Landlords will also continue to be required to provide the courts with information on how the pandemic has impacted their tenants.
- The government has plans to launch “a call for evidence on commercial rents”, aimed at monitoring the progress of negotiations between landlords and tenants in order to settle unpaid rent claims, but no concrete information has been published yet.
Whether you are a landlord or tenant, if you have any queries or want to know more about how the recent announcement may affect you, please contact us at email@example.com.