The commercial rent moratorium was due to come to an end on 30 June 2021 - see previous alerts:
Many businesses, particularly travel and hospitality are still struggling to operate, and with the extension of the lockdown period also now having been announced, certain sectors such as hospitality and leisure particularly, have never been in as precarious a position. Commercial landlords and tenants have been operating under government guidance such as the commercial lease code of practice referred to above, in order to manage their respective lease obligations, but that has guidance status only. Many landlords and tenants had not been able to reach a consensus agreement on how their leases would work moving forward. So there has clearly been tension between landlords and tenants with the deadline of 1 July approaching.
Earlier in March this year, the Rt Hon Robert Jenrick MP (Secretary of State for Housing, Communities and Local Government) and Rt Hon Kwasi Kwarteng (Business Secretary), announced that:
In the period leading up to the latest announcement the government had monitored the “call to evidence” to check whether landlords and tenants had been having productive discussions around their lease agreements. They had invited opinion and comment from the industry and had indicated that if the evidence showed that landlords and tenants had not had productive conversations then the government would intervene. Commentary suggested that the government may see the support extended so for example there would be a phasing out of the rent moratorium, or new measures introduced. It has been reported that the government got over 500 responses to the call for evidence, but that those didn’t push them towards any option in particular. The British Property Federation estimated that there could be up to £7 billion pounds in unpaid rent arrears if the rent moratorium was extended beyond the end of 30 June.
On June 16th the announcement was made which now sets out what the latest measures will be:
Landlords are still better off in the first instance trying to come to agreements with their tenant, as government intervention may only delay rent payments further. Landlords and tenants have a common interest in ensuring survival of any struggling sector and principles of ongoing flexibility and negotiation continue to apply.