Commercial landlords will be unable to evict their tenants until March 2022 following the latest government announcement.

It plans to introduce legislation in this parliamentary session to support the resolution of debts caused by Covid-related business closure and to establish a back-stop so that where commercial negotiations aren’t successful, tenants and landlords go into binding arbitration.

Addressing the House of Commons, Chief Secretary to the Treasury, Steve Barclay (pictured), said that until this legislation was on the statute book, existing measures would remain in place including extending the current moratorium to protect commercial tenants from eviction to 25th March 2022.

He told MPs that landlords and tenants should continue to resolve debts through negotiations: “All tenants should start to pay rent again in accordance with the terms of their lease or agreed with their landlord as soon as restrictions are removed from their sector if they’re not already doing so.”

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Strikes a balance

He added: “We believe this strikes the right balance between protecting landlords and supporting those businesses that are most in need. It sets out a long-term solution to the resolution of Covid-19 rent, ensuring many businesses continue to operate and that debts accrued are quickly resolved to mutual benefit.”

The government launched a call for evidence from both landlords and tenants in March to help decide how to replace or end the protections. Many landlords have raised concerns that the moratorium has allowed businesses to escape paying rent, despite still making profits.

Existing restrictions, originally introduced in March 2020, were last extended in March this year until the end of June.

commercial evictions property mark

Mike Hughes (pictured), trade association Propertymark’s Commercial Executive Member, says: “This seems a very considered way forward and helps commercial landlords as well as tenants as there is a mechanism that promotes a reasonable reaction from both sides.

“Furthermore, tenants who can afford to pay but decide to hide behind the legislation and not pay could find that they fall heavily at mediation or later in court. The banks also get comfort as the focus is on ensuring solvent tenants pay their rent and so allowing a landlord to keep up with mortgage payments.”

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