UK extends ban on evicting commercial tenants

The UK on Wednesday announced it would to extend a ban on commercial landlords evicting tenants until March 31 next year, providing more breathing space to companies hit hard by the coronavirus crisis.

The eviction moratorium, introduced by the government in March to protect businesses after their revenues were cut as a result of Covid-19 economic and social restrictions, has been a major source of conflict between landlords and tenants.

The moratorium, which has been extended twice already, prevents property owners from pursuing tenants for unpaid rent by legal means, or from evicting them.

This latest extension to the arrangements will be the last, said the government.

“This support is for the businesses struggling the most during the pandemic, such as those in hospitality — however, those that are able to pay their rent should do so,” said Robert Jenrick, the communities secretary.

Landlords have complained that tenants were exploiting the arrangements by refusing to pay rent, even when they were able to.

Tenants, meanwhile, have accused some landlords of seeking to circumvent the arrangements by cashing in property deposits in lieu of unpaid rent.

Amid Covid-19 restrictions that included a second lockdown in England in November, trade bodies representing hospitality and retail — two of the hardest hit sectors during the pandemic — lobbied for a further extension to the eviction moratorium.

Helen Dickinson, chief executive of the British Retail Consortium, said: “This news comes in the nick of time for many retailers . . . many are counting on December sales to claw back some of the lost turnover from this year.”

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Melanie Leech, chief executive of the British Property Federation, which represents landlords, welcomed a clear end date for the eviction moratorium.

“In terms of recovering future investment, there has to be a time when landlords can plan for the future,” she said.

But the extension of the eviction moratorium does little to address tenants’ rental arrears, which have ballooned since March.

UKHospitality, which represents bars, pubs, restaurants and hotels, has been calling for an extension of the moratorium until June next year.

The trade body estimates that rent debt will reach about £1.6bn for UK hospitality businesses alone by the end of this year.

“Our concern is that [the latest extension to the eviction moratorium is] too short a stay of execution to force the hand of landlords that are so far unwilling to negotiate,” said Kate Nicholls, UKHospitality chief executive.

According to the BRC, about 80 per cent of retail tenants in the UK have reached agreements with their landlords to pay off rent arrears.

UKHospitality estimates about 50 per cent of hospitality and leisure tenants have reached agreements to defer or waive rents, leaving a considerable number still at loggerheads with landlords over debt which has built up this year.

Jeremy King, chief executive of Corbin & King, which owns restaurants including the Delaunay in London, said that despite extensions to the eviction moratorium “there are a growing number of tenants who are getting no help or leeway from their landlords and in turn from the government. It has to end in tears”.

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