Important step to protect the viability of high streets and town centres

Published 16 September 2020
Last updated 17 September 2020

The Government has announced that it will extend the moratorium on commercial landlords’ right to forfeiture for the non-payment of rent to 31 December 2020, an extension of three months. This is aimed at protecting high streets and town centres.

This extension will provide businesses and employees with certainty as they continue to reopen and protect thousands of vital jobs, particularly in the retail and hospitality sectors which were forced to close earlier in the year. This move will help them remain in their premises without the threat of eviction for the rest of this year, giving them the chance to focus on rebuilding their business over the autumn and Christmas period.

The measures were originally introduced in March 2020 and their objective was to preserve tenants’ businesses through the COVID-19 lockdown and to give time and space to landlords and tenants to agree reasonable adjustments to rent and lease terms, including terms for the payment of accumulated rent arrears. These measures included: 

  1. a moratorium on the landlord’s right of forfeiture for non-payment of rent, implemented through the Coronavirus Act 2020;
  2. restrictions on the service of statutory demands and winding-up petitions, implemented through the Corporate Insolvency and Governance Act 2020;
  3. an extension of the period of arrears required before Commercial Rent Arrears Recovery (CRAR), which enables landlords to seize goods owned by the tenant in lieu of rent owed, can be invoked, implemented through secondary legislation;
  4. publishing a voluntary Code of Practice to encourage constructive dialogue between tenants and landlords; and
  5. working with the financial regulators to issue a joint statement encouraging investors and lenders to consider the issues arising directly from the COVID-19 pandemic in responding to potential breaches of covenants. 

The legislative measures described above were introduced for an initial period of three months but, as the lockdown continued, they were subsequently extended for a further three-month period and were due to expire on 30 September 2020. This announcement, which includes further amendments to the use of Commercial Rents Arrears Recovery, ensures that the measures are in place until the end of the year. This applies in England and Wales.

Secretary of State for Housing Rt Hon Robert Jenrick MP said:

“I am announcing today that we are extending support to protect those businesses that are unable to pay their rent from eviction to the end of the year. This will stop businesses going under and protect jobs over the coming months.

“This government is committed to supporting businesses and our high streets at this difficult time, and this extension of support will help businesses recover from the impacts of the pandemic and plan for the future.”

Business Secretary Alok Sharma said:

“During this particularly challenging time for businesses, it is crucial that both landlords and tenants have the clarity and reassurance they need to build back better from the pandemic.

“Extending the temporary measures we put in place earlier this year to protect businesses from the threat of eviction will give them some much-needed breathing space at a critical moment in the UK’s economic recovery.”

Given the pace of recovery in the high street, the Task Force sees this as an important step that will contribute to the recovery of our town centres.  

Further details are here.

Photo William McCue, Unsplash