Government Extends Supportive Measures For Commercial & Residential Tenants

Commercial tenants

This week, the Housing Secretary, Robert Jenrick, announced that the Government will be providing further support to commercial tenants, whose business operations have had to stop or been severely impacted as a result of Covid-19 restrictions, by extending the current ban on evictions for an additional three months (until 30th June 2021).

By extending the ban, the Government is hoping that it will allow for the businesses worst affected by the lockdown restrictions – such as those in the hospitality sector – to recover from 17th May (step three of the roadmap) when they are allowed to fully reopen.

The current restriction on the use of the Commercial Rent Arrears Recovery (CRAR) process has also be extended until 30th June. As part of this measure, it will increase the total number of days’ outstanding rent required for CRAR to be used to 457 days’ between 25th March and 23rd June, and 554 days’ between the 24th and 30th June.

Furthermore, included within the statement issued by the Government, it calls for evidence on commercial rents to help monitor the overall progress of negotiations between tenants and landlords. This evidence will help set out the potential steps that could be taken after 30th June 2021, which includes a phased withdrawal of the current measures protecting tenants and legislative options targeted at those companies which have been worst hit by the pandemic.

The statement has further stated the Government’s intent to undertake a review of commercial landlord and tenant legislation, which includes Part 2 of the Landlord and Tenant Act 1954.

Residential tenants

Government Support Measures TenantsIn respect of residential tenants of social or private rented accommodation, the Housing Secretary has confirmed that the following measures will be extended until at least 31st May 2021:

  • The ban on bailiff-enforced evictions of tenants in the majority of cases (excluding the most serious circumstances – e.g. cases of fraud, anti-social behaviour or domestic abuse); and
  • The moratorium on the provision which allows for landlords to provide a six month notice period to residential tenants prior to their eviction.

The Government has said that the extension of these measures will ensure that residential tenants continue to be provided with “enough time to find alternative accommodation or support as we move through the roadmap”.

Robert Jenrick commented:

“It is right that as we move through the roadmap, we ensure that businesses and renters continue to be supported.

“We have taken unprecedented action to support both commercial and residential tenants throughout the pandemic – with a £280 billion economic package to keep businesses running and people in jobs and able to meet their outgoings, such as rent.

“These measures build on the government’s action to provide financial support as restrictions are lifted over the coming months – extending the furlough scheme, business rates holiday and the Universal Credit uplift.”

The Business Secretary, Kwasi Kwarteng, added:

“We’re doing everything we can to ensure businesses get the support they need to get through this pandemic and reopen when it is safe to do so.

“I know business owners will welcome this latest package of support and the breathing space it will give them to prepare for a safe reopening, and, ultimately, to build back better.”

However, the extension of these measures has not been welcomed by everyone.

The Chief Executive of the National Residential Landlords Association, Ben Beadle, has said that the extension will leave many landlords across the country with further financial difficulties as they will continue to have to operate without receiving rental income:

“The further extension to the repossessions ban will do nothing to help those landlords and tenants financially hit due to the pandemic.

“Given the cross-sector consensus for the need to address the rent debt crisis, it suggests the government are unwilling to listen to the voices of those most affected.

“If the Chancellor wants to avoid causing a homelessness crisis, he must develop an urgent financial package including interest-free, government-guaranteed loans to help tenants in arrears to pay off rent debts built since March 2020.

“This is vital for those who do not qualify for benefit support. Without this, more tenants face losing their homes, and many will carry damaged credit scores, making it more difficult to rent in the future and causing huge pressure on local authorities when they can least manage it.”

The Government has reiterated that tenants and landlords need to work together and that all avenues need to be explored with regards rent payments to ensure that these cases only end up in the Courts as a final and last resort.

Additionally, landlords should take into consideration a tenants’ circumstances when agreeing a repayment plan, and that where tenants are able to pay any or all of their rent, they should do so.

How can Nelsons help?

For more information or advice in relation to these measures, please call Simon Waterfield, Oliver Maxwell or another member of our Property Disputes team in Derby, Leicester or Nottingham on 0800 024 1976 or contact us via our online form.