Business Evictions Ban extended until 31st March - Kuits Solicitors Manchester
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Business Evictions Ban extended until 31st March

Business Evictions Ban extended until 31st March

5th January 2021 - Published by Kuits Restructuring & Insolvency team

The Government announced in December 2020 that the business evictions ban as part of the Government’s response to COVID-19, will be extended for the final time until 31st March 2021. At the same time the Government has encouraged tenants to pay their outstanding rent, where they can.

This protection will have covered the usual rent payment days for five quarters’ rent – March, June, September and December 2020 and March 2021.

This final extension gives landlords and tenants a further three months to come to an agreement on unpaid rent. The Government will publish further guidance to support tenants and landlords to work together to agree rent payment options.

Commercial Rent Arrears Recovery

The restriction on landlords using Commercial Rent Arrears Recovery (CRAR) to recover unpaid rent will also extend to the end of March; as will insolvency measures on restricting statutory demands and winding up petitions.  However, landlords can still court initiate proceedings ahead of 31st March.

Currently the numbers of Company Voluntary Agreements (CVA) being approved is down on 2019, but tenants may seek advice on obtaining CVAs to regulate their rent position, which could have a long term effect on rent roll received by landlords.

A key concern is that April 2021 may see a substantial forfeiture of leases. However, if landlords are unable to re-let the properties, they will face liability for business rates after the three months’ Empty Business Rates Relief period expires. We will have to see if the Government considers Business Rates as part of their pandemic recovery plan.

Alongside this announcement, the Government also announced a review of the “out-dated” commercial landlord and tenant legislation. The review will consider how to encourage collaboration between commercial landlords and tenants, and how to improve the leasing process to ensure high streets and town centres thrive.

It is currently unclear what this review will cover. The Landlord & Tenant Act 1954 is fundamental to how commercial property leases have operated for over 65 years. A wide review of this legislation could impact on this and how leases are drafted and governed going forward. Alternatively the review could focus on more specific issues such as landlord remedies, for example forfeiture or Commercial Rent Arrears Recovery. It is difficult to imagine that the Government will have time to undertake a wholesale review of the 1954 Act, when they will be focusing on the country’s recovery from the pandemic together with Brexit.

Get in touch with a Restructuring & Insolvency lawyer in Manchester

If you would like any advice on any of these issues, please contact our Head of Restructuring & Insolvency, Richard Palmer, on 0161 503 2996 or email richardpalmer@kuits.com.

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