With the deadline approaching for most restrictions to come to an end on the 30 June 2021, the Government have now announced on the 16 June that further extensions are proposed in order to protect tenants from forfeiture, rent arrears recovery or bankruptcy proceedings.

You can access the Government full press release here.

The new restrictions are to give businesses that have been closed during the pandemic further breathing space to recover from the unprecedented financial toll they have endured. New rules are to be established to ringfence COVID-19 commercial rent arrears that has built up when a business has remained closed during the pandemic.

The key expected changes announced so far are:

  1. Eviction ban preventing forfeiture for unpaid rent extended until 25 March 2022;
  2. CRAR restrictions to continue with 554 days rent arrears outstanding required;
  3. Restrictions on relying upon statutory demands and winding up petitions to be extended until 30 September 2021.

The Government’s latest announcement proposes that landlords will be expected to make allowances for the rent arrears incurred during the pandemic that can be ringfenced during the specific period’s tenants were forced to be closed and share the financial impact with their tenants. A new arbitration process will be set up to settle rent debt claims for those tenants whose businesses have been impacted by closures. Whether that is limited only to businesses that had to close as well as those linked to closed businesses (e.g. breweries supplying the pub industry) remains to be clarified. Arbitration is a process used in litigation where a specialist arbitrator receives submissions from both parties and makes a final binding decision sometimes without a hearing. More on this new arbitration scheme to follow once the Government have published the framework for it.

For more information on how commercial landlords can recover rent arrears read our summary here.

We shall continue to monitor the changes and update this article as announcements are made.

For more information about the restrictions contact David Eminton or Nicola Davies in our Property Litigation team.