Commercial Landlord & Tenants – a vital update

Earlier this month, the Government decided to extend the current ban in place on commercial evictions to March 2022. This is great news for the tenants out there currently suffering from a lack of trade and income. However, this news will be a huge blow to the commercial landlords.
It is estimated that since the start of the pandemic, there has been over £6 billion of unpaid rent bills and it is thought that a significant amount of that has been written off by the landlords.

The measures will remain in place until 25 March 2022 and the Government has said that “it is to ensure that the sectors who are unable to open have enough time to come to an agreement with their landlord without the threat of eviction”.
One sector that will be very grateful of this extension will be the hospitality sector, which has faced further setbacks this month with restrictions not being fully lifted on 21 June 2021 as originally envisaged.

The Government will introduce legislation to ring-fence outstanding unpaid rent that has accumulated over the period of time that a business has had to remain closed during the pandemic.

The government have taken a firm stance and has made it clear that businesses who are able to pay their rent, must do so. Tenants should start paying their rent as soon as restrictions change, and they are given the green light to open.

Landlord and tenants need to work on agreements going forward. One option is for the landlord to waive some of the unpaid amount. This is not ideal for the landlord as they will inevitably have bills to cover, but for a tenant this will be a welcome relief. Another option could be for the landlord and tenant to set up a longer term repayment plan. This would involve the tenant paying an additional amount on their rent each month or quarter until the outstanding amount has been paid. This looks to be a sensible option as it allows the tenant time to repay the amount owed, without the pressure of eviction hanging over them. For the landlord they will then receive the rent owed and also the unpaid rent from the previous months.

All of these areas are extremely difficult to navigate and agreements made should be with a full understanding how this can affect the landlord or the tenant’s obligations under the lease and the current, existing (and highly complex) commercial landlord and tenant legislation.

If you are a landlord or a tenant and you require advice on how to approach such a commercial negotiation, or how to ensure it is documented properly, or how it may affect your future legal obligations, come and speak to BTMK. We have teams of very experienced commercial landlord & tenant solicitors who will be able to guide you through the minefield of legislation and small print.

You can contact BTMK at [email protected] or 24/7 on 03300 585 222.or by using our website at (24/7 live chat available).

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