Retailers protected from evictions until 2021 as gov’t extends ban

Retailers protected from evictions until 2021 as gov't extends ban
(Image: PA)
// Government extends ban on property evictions, which includes retail
// The moratorium was first introduced in April and was due to expire at the end of September

The UK Government has announced it is extending support to stop business evictions until the end of 2020.

Measures were put in place at the start of the pandemic to protect struggling firms – such as retailers and restaurants – from being evicted from premises, but were due to expire at the end of September.

Communities Secretary Robert Jenrick confirmed the eviction ban will now continue until the end of the year, in a move the government hopes will stave off potential job losses due to the Covid-19 pandemic.

READ MORE: Rent relief row comes to a head for retailers and landlords

It marks second extension of the moratorium that was originally implemented in April with an initial August expiry date.

The extended support will benefit many retailers who have received other subsidies, such as the business rates holiday for the current financial year.

The government said it would also extend the ban on landlords using bailiffs to enforce unpaid rent on these commercial leases until the end of the year.

It also called on landlords and tenants to work together to agree rent payment options for the rest of the year if tenants are struggling.

“I am announcing today that we are extending support to protect those businesses that are unable to pay their rent from eviction to the end of the year,” Jenrick said.

“This will stop businesses going under and protect jobs over the coming months.

“This government is committed to supporting businesses and our high streets at this difficult time, and this extension of support will help businesses recover from the impacts of the pandemic and plan for the future.”

The ban prevents landlords from issuing retailers with statutory demands and winding up orders where they have not paid rent.

It also bans landlords from using Commercial Rent Arrears Recovery (CRAR) to collect rent unless they are owed 90 days of unpaid rent.

However, landlord associations have criticised the extension and suggested its one-size-fits-all policy was the wrong approach.

“The further extension of the moratoriums is a real blow to the high street,” Revo chief executive Vivienne King said.

“We have repeatedly explained to Government how the moratoriums are being enjoyed by major financial businesses which they were never intended for.

“A short-term emergency measure aimed at genuinely vulnerable operators is being exploited to preserve cash flow by major high street chains who will only prolong the pain of high street recovery and unseat the Government’s own levelling up agenda.”

She added: “The shortfall in UK rent payments at the second quarter alone was £1.5 billion and that can now be expected to increase sharply later this month.

“This sudden loss of income will reverberate through the financial system to savers and pensioners that directly or indirectly rely on commercial property for income and may begin to have material impacts on credit supply, if lenders find themselves overwhelmed by defaulting landlord borrowers. The current situation is simply not sustainable.”

British Property Federation chief executive Melanie Leech said: “It is hugely disappointing that the government has decided on a blanket extension to the moratorium, when the majority of property owners and tenants are working collaboratively together, and well-capitalised businesses continue to exploit the intervention, refusing to pay rent despite being able to afford it.

“It is imperative, for the health of the pensions and savings funds that own our high street, that the government confirms this is the last extension and sets out an exit strategy to clearly outline to both property owners and tenants how we are going to transition back to normal market conditions and overcome what is a growing and for some an insurmountable challenge of rent arrears.”

On the other hand, the BRC welcomed the government’s extension announcement.

“We’re pleased that govt has listened to us and others on the issue of rents,” BRC business and regulation director Tom Ironside said.

“It remains a difficult time for store-based retailers, who face high costs from coronavirus safety measures, and significantly lower footfall.

“While the extension of the moratorium will provide a respite for many struggling retailers, a large Christmas Day rent bill would be a disaster during the all-important peak trading period.

“Some protections have not been included in this announcement, such as the ban on Statutory Demands and Winding up petitions.

“Without these, and County Court judgements, the protections that have been extended will be undermined.

“Nonetheless, we hope those landlords who haven’t agreed settlements with their tenants will use this extra time and negotiate a reasonable deal that shares the impact of coronavirus fairly.”

with PA Wires

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