The UK government will allow commercial landlords to evict tenants again – however arrears accrued during the pandemic will be ringfenced.
New legislation will mean commercial tenants can only be evicted if they didn’t pay the rent before March 2020, or if they were unaffected by business closures during the pandemic.
They will also be expected to pay the rent as per their lease once the new rules come into play, or if they have reopened and started trading as normal.
The new policy will replace the current measures of banning the eviction of commercial tenants completely.
However the government added that this new legislation should only be used as a last resort.
Indeed, it said tenants and landlords should look to negotiate, adding that landlords are expected to defer or waive appropriate proportions of rent arrears in order to share the financial burden of the pandemic with their tenants.
The moratorium on evictions currently lasts until 25 March 2022, with the latest of multiple extensions taking place in June. This policy will continue until the new legislation comes into force.
The government will publish more details on what it expects from commercial landlords and tenants before the new system is active.
The announcement comes after the launch of a call for evidence from both commercial landlords and tenants.
Nearly all landlords (89.5%) favoured tenant protections ending on the 30th June 2021.
Meanwhile two thirds (66.3%) of tenants favoured the introduction of a scheme of binding arbitration to resolve rent debt.
Clearly the government is attempting to shoot for the middle ground, by looking to keep businesses trading but giving landlords some powers to evict non-paying tenants again.
The government favours introducing a process of binding arbitration between landlords and tenants who are unable to reach an agreement on rent debt, but it’s so far unclear exactly how it will work.