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Commercial tenancy call for evidence launched

7th April 2021

The previously promised call for evidence concerning the relations between commercial tenants and landlords has finally been launched.

The initiative was announced alongside the extension to the eviction moratorium in early March. However, businesses have been left awaiting clear information of how to submit evidence of their experiences over the past 12 months.

Ultimately, the government wish to understand how landlords and tenants are responding to the build-up of rent arrears over the course of the pandemic.

The Ministry of Housing, Communities & Local Government have explained that:

“This will inform a better understanding of the risk to economic recovery posed by remaining rent debts, and to understand how landlords and tenants are adjusting existing lease terms to reflect the period of recovery that many tenant businesses will need once the trading restrictions are lifted.”

The evidence will also be used to inform future measures protecting commercial tenancies and preserving the landlord-tenant relationship once the final extension to the eviction moratorium and the restrictions surrounding the use Commercial Rent Arrears Recovery (CRAR) come to an end.

 

The latter part of the call for evidence is constructed as a survey that invites respondents to comment on the impact of six possible routes forward:

  • Option 1 – Allow these measures to expire on 30 June 2021;
  • Option 2 – Allow the moratorium on commercial lease forfeiture to lapse on 30 June 2021 but retain the insolvency measures and additional rent arrears amendments to CRAR for a period of time;
  • Option 3 – Target existing measures to businesses based on the impact that COVID restrictions have had on their businesses for a limited period of time;
  • Option 4 – Encourage increased formal mediation between landlords and tenants;
  • Option 5 – Non-binding adjudication between landlords and tenants; and
  • Option 6 – Binding non-judicial adjudication between landlords and tenants.

The government have also stated explicitly that:

“If there is evidence that productive discussions between landlords and tenants are not taking place, and that this represents a substantial and ongoing threat to jobs and livelihoods, the Government will not hesitate to intervene further.”

A relatively short consultation period has been planned which closes at midnight on the 4th May 2021. The submissions must then be reviewed and the measures implemented before the end of June.

It is therefore integral that any commercial tenants that have felt unfairly treated by their landlord, or their landlord’s representatives, use this opportunity to clearly describe their experience and help better their situation and the situation of others.

The CTA have released the following comment about the call for evidence:

“We are pleased to see the government are taking an informed approach to any future protective measures following the conclusion of the moratorium. The clock is now ticking to gather the evidence and formulate a logical plan that will support commercial tenants, encourage economic recovery and avoid the catastrophic cliff-edge that we are rapidly approaching at the end of June.

We urge all commercial tenants to provide evidence of their experience to help drive change together.”

The call for evidence survey can be found here.

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