News & Insights
The Government issued a call for evidence concerning commercial rent and relations between commercial landlords and tenants between the 6th of April and the 4th of May 2021.
The Government recently released their findings after careful analysis of evidence received from 508 respondents.
Whilst the two main respondents (86% of the total respondents) were commercial landlords and tenants, anybody relating to the industry was able to submit evidence.
There were 306 responses to the call for evidence who identified as commercial tenants and 133 respondents who identified as direct investors, landlords or commercial property owners.
Others comprised of representative organisations including the CTA (13 respondents), surveyors/agents (13 respondents); legal (12 respondents); property managers (6 respondents); debt enforcement (5 respondents); and mediation / alternative dispute resolution (1 respondent).
|Size||Respondents (number)||Employees (number)||Annual turnover (Total, £ millions)|
Respondents to the call for evidence highlighted that the majority of these outcomes were an agreement of longer duration to pay arrears (experienced by 39.2% of tenants and 61.7% of landlords), an agreement to write-off of an agreed amount of rent arrears (experienced by 33.3% of tenants and 54.1% of landlords) and a reduced rent for a proportion of the remainder of the lease (experienced by 18% of tenants and 44.4% of landlords).
However, more tenants (54.9%) had not been able to agree any concessions than those that had been able to (42.2%).
The sectors given the most concessions were as follows: Retail, Hospitality and Leisure granted by 71.4%, 66.2% and 45.9% of landlords respectively.
The most common reasons for not being able to repay rent arrears was a lack of income and that the built-up debt was too great.
Respondents to the call for evidence were asked to rank the options for in order of their preference.
Commercial tenants will be protected by the eviction moratorium extension, and the corresponding restriction on the use of CRAR to settle rent disputes, through until the 25th March 2022.
However, the restriction on the use of winding-up proceedings will expire at the end of September.
In the meantime, the call for evidence helped inform the government that option six would be the most appropriate course of action of the options they put forwards.
Binding arbitration will be used to settle pandemic rent debt disputes.