Protections for commercial property tenants extended to 31 March 2021

Protections for commercial property tenants extended to 31 March 2021

Protections for commercial property tenants extended to 31 March 2021

Following an announcement by the government yesterday, the deadline for ending the protections afforded to commercial property tenants under Coronavirus legislation have been extended to 31 March 2021.

Business owners are being given extra breathing space this Christmas knowing that, come 1 January, they cannot now be evicted until the earliest 1 April 2021 on grounds of rent arrears alone. The restriction on landlords using Commercial Rent Arrears Recovery (CRAR) has also been extended to 31 March 2021, along with insolvency measures on restricting statutory demands and winding up petitions. 

This does not come as a great surprise given the government has already extended the furlough scheme to the Spring. The announcement does however, come with a health warning. 

The government says this is the “final extension”, so (unless this transpires to be an early April fool) tenants have effectively been given three more months to resolve their differences with landlords before the restrictions fall away. An announcement on how parties will be encouraged to do this is expected to follow, with additional guidance on the government’s Code of Practice, published in June 2020 to encourage landlord and tenants to work together, promised in early January 2021. However, unless the Code becomes enforceable in law, it is difficult to see what additional guidance will achieve. 

There is also talk of the government looking at the impact the Coronavirus has had on the commercial property market and ringing the changes to “out of date” commercial landlord and tenant law. The government has hinted that it will launch a review of Part II of the Landlord and Tenant Act 1954 (which currently affords tenants an automatic right to a new lease) and different models of rent payment. The commercial property market is a finely balanced ecosystem.  Any changes will, therefore, need to respect the interests of both landlords and tenants, as well as ensure that UK commercial property continues to offer an attractive home for both domestic and international investment.

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