COLUMN: Moratorium on commercial rents extended

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THE eviction ban on businesses from their premises for rent arrears is now extended and this will obviously have implications for commercial landlords.

The Covid-19 pandemic has been an unpredictable time for many Saddleworth businesses. The eviction ban was due to be lifted on June 30, 2021 and landlords could have then pursued non-paying tenants for commercial rents not paid. Now that date is extended to March 25, 2022 leaving landlords with an additional 10 months until they can take action.

The ban was first introduced in March 2020, so for some landlords it may be two years until any action can be taken to evict tenants from the commercial property.

Initially the moratorium was hoped to have helped mainly the hospitality and retail sectors who suffered from closure and limited trading during the pandemic. It was expected that businesses could have traded their way out of debt and begin to repay any rent arrears, but with restrictions in place longer than anticipated that has not been the case.

Landlords cannot forfeit a commercial lease for non-payment of rent, and we would advise all struggling landlords to consider the following options:

Usman Anwar, Litigation Solicitor at Pearson Solicitors

• Utilise the UK Government’s binding arbitration scheme to resolve disputes between landlords and commercial tenants. Such a scheme will be in place until the eviction ban is lifted in March 2022.
• Consider debt recovery proceedings against the tenants and any personal guarantors.
• Wait until October 1, 2021 to issue statutory demands, a formal request for payment or winding-up petitions if the business owes them money. The ban on statutory demands or winding-up petitions for seeking rent arrears may be extended.

Tenants are also advised to pay what they can and pay rent in full and we would always urge landlords to be supportive as it’s in the best interest of all parties to have a good working relationship.

Usman Anwar, Litigation Solicitor, said: “The extension of the ban on evicting commercial tenants for rent arrears to March 2022 will be disappointing for many landlords. Existing debts and rent arrears will continue to accumulate and commercial property owners are obviously adversely affected by this.

“We offer a free initial meeting to commercial landlords to provide guidance with the aim of identifying other tenant breaches which may not be clear and to provide clear and cost effective solutions, but would always advise on trying to keep communication channels open with tenants and have a good working relationship.”

Some commercial landlords may be suffering a huge backlog in rent arrears and are being crippled due to the lack of rental income. As the latest quarterly rent day comes and goes, commercial landlords have again experienced a shortfall which in turn is putting a strain on their businesses and families.

If you are unsure about your options or need further help and advice on landlord and tenant disputes, contact our Litigation Solicitors and speak to Usman Anwar on 0161 785 3500 or email Usman.Anwar@pearsonlegal.co.uk

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