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Commercial eviction ban extended to March 2022

The ban on commercial evictions due to end this month has been extended again until 25 March 2022, to the dismay of many commercial landlords.

Whilst an extension of the current moratorium has been widely predicted, few thought it would be prolonged for a further nine months or be accompanied by new primary legislation forcing concessions onto landlords.

This means the eviction ban will now run past the two-year mark, increasing the severe financial difficulties already being shouldered by commercial landlords because of the pandemic.

Why has the ban been extended?

The latest extension is specifically aimed at helping some of the businesses worst affected by the pandemic, like bars and restaurants, after the planned 21 June easing of lockdown plan was delayed.

What other changes should commercial landlords know about?

Commercial Rent Arrears Recovery (CRAR)

  • The government has also extended the restriction of the use of the CRAR bailiff process by landlords until 25 March 2022.

Statutory demands and winding up petitions

  • These restrictions remain in place for a further three months, until 30 September 2021. Under the current restrictions, creditors are unable to take enforcement action against a debtor who has been financially affected by Covid-19.

What changes will the new primary legislation bring?

The government says it will ‘ringfence outstanding unpaid debt that has built up when a business has had to remain closed during the pandemic’.

Although current details are scant on how this new approach will work, we do know that:

  • Landlords will be expected to share the financial impact of arrears with their tenants and to make allowances for ringfenced rent arrears. This could include landlords agreeing to waive some of the rent owed to them and/or agreeing to a long-term repayment plan.
  • When landlord and tenant can’t agree, a binding arbitration process will kick in to resolve the dispute. This process will be delivered by ‘private arbitrators’ who will have to ‘go through an approval process to prove their impartiality’.

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Wards Solicitors’ highly experienced Commercial Property Disputes team can provide more information, advise you on what to do next and help find a solution.

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