The Government recently announced that they have produced another U-turn by renewing the measures it introduced to protect tenants in the commercial property sector unable to pay their rent due to the COVID-19 pandemic. Previously, (albeit this was an extension to the original decision), commercial tenants benefitted from a prohibition on landlords forfeiting commercial leases for non-payment of rent. This measure was due to expire on 31st March 2021 and despite assurances from the Government in December 2020 that this would be the final extension to protections from the threat of eviction, the Government has announced that the restriction on forfeiture will in fact be extended once again, this time until 30th June 2021.
In addition, the Government has also renewed the restriction on landlords using Commercial Rent Arrears Recovery (CRAR) to recover unpaid rent, which was due to expire on 31st March 2021, but has now been extended until 30th June 2021. This measure will increase the total number of days' outstanding rent required for CRAR to be used to 457 days if CRAR is to be used between 25th March and 23rd June, increasing to 554 days' if CRAR is to be used between 24th and 30th June. It is not yet clear whether the Government will extend the measures introduced by the Corporate Insolvency and Governance Act 2020 restricting the use of statutory demands and winding-up petitions which is due to expire on 31st March 2021.
Whilst the Government state that they are wanting to support both commercial landlords and tenants to agree their own arrangements, inevitably this leads to conflict between the two parties which is not the basis of a good landlord and tenant relationship going forward. Many landlords are now having to deal with the fact that some tenants are simply refusing to pay rent due even if they are in a position to.
Richard Fairey, Director and Head of Property Management said “This last twelve months has been the hardest and busiest period of my career in property management! When the pandemic hit and businesses were forced to shut, the Government announced the measure to protect businesses and jobs, so me and the team at Rushton Hickman had to quickly deal with an extraordinary amount of enquiries from both landlords and tenants to arrange payment plans etc.”
“Things have progressed since the start of the pandemic and we’ve been able to keep both landlords and tenants happy since that initial period, ensuring a good ‘landlord and tenant’ relationship has been maintained by being the ‘middle man’ and ultimately agreeing a happy compromise. However, now with many businesses either back open or having benefitted from Government grants and furlough, the latest extension brings more uncertainty for all parties. It is vital that landlords take the right advice in regard to decisions they make with their property management choices and the Rushton Hickman team are here to help any landlord and to explain their options”.
Jade Martin, Property Manager at Rushton Hickman added “Whilst the Government’s decision is disappointing, it was also somewhat inevitable given the extension to the latest lockdown. It is important that landlords protect their interests as best as possible due to the lack of Government support for landlords compared to tenants and we are here to advise on the best way forward for their property as it is not always as simple as rent collection issues but dilapidations, and other statutory matters. I would therefore encourage landlords to get in touch with myself or Richard to discuss your position and how the Rushton Hickman team could help you."
Richard Fairey - Director Jade Martin - Property Manager
Rushton Hickman LimitedView all articles