Ban on business evictions three-month period extended to September
The UK government has extended measures to prevent struggling companies from eviction over the summer. The extension to the three-month period announced in March – until the end of September – comes alongside further support to help local businesses plan for economic recovery following the coronavirus pandemic.
A new code of practice has been developed with leaders from the retail, hospitality and property sectors to provide clarity for businesses when discussing rental payments and to encourage best practice so that all parties are supported.
The code is voluntary for businesses and is relevant to all commercial leases held by businesses in any sector that have been impacted by the coronavirus pandemic. It encourages tenants to continue to pay their rent in full if they are in a position to do so and advises that others should pay what they can, whilst acknowledging that landlords should provide support to businesses if they are able to do so.
The suspension of the forfeiture of evictions will come as a relief in particular to pubs, cafes and restaurants, after the hospitality sector called upon the government for action in this area.
Communities Secretary, Rt Hon Robert Jenrick MP said:
“As our high streets come to life and our town centres open for business, it is crucial that both landlords and tenants have clarity and reassurance as they seek to keep their finances stable and bounce back. That is why we are extending measures to protect those who are unable to pay rent from eviction so that businesses have the security they need to plan for their futures.
“And in recognition of the strain that the virus has had on our high streets, our new code, backed by leaders across the industry, will help unlock conversations on rent and future payments whilst ensuring best practice is displayed across the board as we confront the challenges of this pandemic.”
Business Secretary Alok Sharma MP said:
“From clothes stores to our local book shop, we want as many high street businesses as possible to emerge from the pandemic, in the best position to bounce back. During this particularly challenging time for businesses, our retail stores are safely welcoming shoppers back and taking the necessary steps to drive economic recovery.
“By putting a stop to unreasonable evictions, these measures will protect jobs and provide further flexibility to our high street businesses that were trading successfully before the COVID-19 emergency, so they can focus on continuing to deliver for their customers and communities.”
The UK government has confirmed the following changes to the existing package of measures for the commercial sector:
- It will lay a statutory instrument to amend the Coronavirus Act to extend the time period for suspension of the forfeiture of evictions from 30 June to 30 September, meaning no business will be forced out of their premises if they a miss a payment in the next three months.
- It will also lay secondary legislation to prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent. The time period for which this measure is in force will be extended from 30 June to 30 September.
- An amendment to the Corporate Insolvency and Governance Bill has been tabled, which will extend the temporary ban on the use of statutory demands and winding-up petitions where a company cannot pay its bills due to coronavirus until 30 September.
Paul Bagust, Global Property Standards Director, Royal Institution of Chartered Surveyors said:
“We are pleased to have helped government in shaping this code which will increase constructive engagement and transparency between landlords and tenants at this challenging time. We believe it will provide a basis for negotiated measures which recognise the mutual importance and interdependence of landlords and tenants in contributing to the economy.”