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The Moratorium on Commercial Rents - March 2022!
The UK government has announced an extension to the moratorium on commercial rents until 25 March 2022 and is set to introduce a mandatory arbitration process to tackle debts where landlords and tenants cannot agree.
Treasury chief secretary Steve Barclay told MPs in the House of Commons last Wednesday afternoon, that the ban intended to be lifted on 30 June, would remain until next March.
In April the government launched a call for evidence in respect of further action to resolve the debts of those businesses who were struggling to pay rents resulting from the restrictions and pressures caused by the pandemic. As a result, there will be new legislation to tackle issues where commercial negotiations between landlords and tenants break down, to go to binding arbitration. However, given the length of time it will take to draft and implement the legislation, the moratorium will remain in place.
It is of course reiterated that where possible, all tenants should start to pay rent again in accordance with the terms of their lease, or as otherwise agreed, as soon as restrictions are lifted on their sector. The measures are intended to assist with the debt accrued in respect of unpaid rent and there is suggestion that these debts should be ring-fenced and landlords and tenants to be encouraged to share the burden. Certainly where business are back operating, ongoing and future rents should be paid.
There are also extensions to the restrictions on the use of Commercial Rent Arrears Recovery (CRAR) and the serving of statutory demands and winding up petitions where COVId-19 was the cause of the inability to pay the debt.
As has been the case all along, there is still the alternative option for seeking recovery of debt by way of county court proceedings for the debt.
Contact us
If you are a commercial landlord or tenant and wish to discuss the current issues, please contact our Commercial Property team team for more information.
Michelle Cox
Michelle.Cox@Chattertons.com
01780 750663