On Friday (19th June) the Government extended protection from eviction for businesses over unpaid rent for a further three months, lasting until the end of September, says commercial property agent Prop-Search.
A three-month ban on evictions of commercial tenants for non-payment of rent was first introduced in March and was set to last until 30 June. However, the Government believes that by extending this it will help protect jobs and provide further flexibility for businesses, in particular those sectors that have not been released from ‘lockdown’ measures such as hospitality.
Along with the eviction ban, the Government has also extended other temporary protections for commercial tenants for a further three months, ending 30 September. These include a ban on landlords using winding-up orders or statutory demands against businesses over unpaid rent.
The Ministry of Housing, Communities & Local Government has also announced details of a new ‘Code of Practice’, intended to guide negotiations between businesses and landlords.
Simon Toseland, a Director of Prop-Search, said: “The Code has been developed with leaders from the retail, hospitality, business and property sectors to provide clarity when discussing rental payments and to encourage best practice so that all parties are supported.”
“As expected, the Code is voluntary and is relevant for all commercial leases held by businesses, in any sector, which have been impacted by the coronavirus pandemic.”
The legal position is that tenants are liable for covenants and payment obligations under the lease, unless this is renegotiated by agreement with landlords. Tenants who are in a position to pay in full should do so and those who are unable to pay in full should seek agreement with their landlord to pay what they can, taking into account the principles of the Code.
Simon Toseland, concludes: “This will allow landlords to support those tenants who are in greatest need and to maintain development activity which will contribute to economic recovery. It also means landlords should provide support to a tenant where reasonably possible, whilst having regard to their own financial commitments and fiduciary duties.”