Letter - extension to the moratorium on commercial evictions by Robert Jenrick MP, Communities Secretary

Today I have announced and implemented an extension to the moratorium on commercial landlords’ right to forfeiture for the non-payment of rent (Section 82 Coronavirus Act 2020). The moratorium that was due to expire on 30 September 2020 has been extended via statutory instrument by three months, to the end of the year.

This extension will help provide businesses and employees with certainty and protect vital jobs, particularly in the retail and hospitality sectors. It will help businesses remain in their premises without the threat of eviction, giving them the chance to focus on rebuilding their business over the autumn and Christmas period.

Today’s measures are on top of the wider ranging financial package provided by the UK government, backed by £160 billion, to protect jobs, incomes and businesses throughout and beyond this pandemic.

Since March, government has implemented a range of measures to specifically support commercial landlords and their tenants. The objective of these measures 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:

• A moratorium on the landlord’s right of forfeiture for non-payment of rent, implemented through the Coronavirus Act 2020.

• Restrictions on the service of statutory demands and winding-up petitions. These are currently in place until 30 September, but we are working closely across Government to consider a similar extension.

• Today I am announcing an extension of the period of rent owed before Commercial Rent Arrears Recovery can be invoked. This ensures landlords cannot seize goods owned by the tenant in lieu of rent owed, until the end of the year, aligned with the extended moratorium on commercial evictions.

• A Code of Practice to encourage constructive dialogue between tenants and landlords.

• Working with financial regulators to issue a joint statement encouraging investors and lenders to consider the issues arising directly from COVID-19 in responding to potential breaches of covenants.

Government is clear the extension to the moratorium and wider measures do not constitute a rental holiday, and businesses that are still able to pay rent are expected to do so. These are temporary measure in order to protect people’s jobs and give businesses security. Government recognises that it cannot go on indefinitely but the purpose is to support businesses that would otherwise default or fall into rental arrears to continue to operate without risking eviction. Landlords are still owed rent and, following the relevant period, will still be able to claim for forfeiture - unless they have expressly waived that right in writing.

We expect both sides of the sector to use this time to negotiate and government will intervene further if necessary. The Code of Practice published in June provides guidance to both parties to ensure that negotiations can progress effectively, including stating that those tenants who can pay in full should do so; those who cannot should pay what they can; and that landlords should grant concessions where they reasonably can.

England, Northern Ireland and Wales are covered by the protection from forfeiture in the Coronavirus Act. Section 82 relates to England and Wales, and the Welsh Government have already laid a statutory instrument to extend the measures for an additional three months. Section 83 relates to Northern Ireland, who are currently considering a similar extension. The Scottish Government passed separate emergency legislation to implement similar measures.

Yours sincerely,