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Government Set to Review Commercial Tenant Support Initiatives

18th March 2021

The government is seeking to refresh the Code of Practice for commercial property relationships during the COVID-19 pandemic. New protective measures and guidance may be introduced in late June to reflect the lifting of restrictions. This may help direct future relations between commercial tenants and their landlords.

The government have offered businesses a variety of COVID support initiatives over the past year, but their guidance regarding landlord-tenant relations during the pandemic has been a hot topic of conversation, often for the wrong reasons.

Tenants were relieved to hear that the eviction moratorium had been extended again until 30th June 2021 and, in addition to the moratorium extension, the Ministry of Justice will also lay a Statutory Instrument to extend the restriction on the use of the Commercial Rent Arrears Recovery (CRAR) process by landlords. This measure 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.

However, the announcement made by Secretary of State for Housing, Communities and Local Government, Robert Jenrick, also indicated that the government would reconsider these protective measures and reassess the effectiveness of the guidance surrounding landlord-tenant relations following the end of the eviction ban.

Consequently, through an active “call to evidence” scheme, which looks at monitoring commercial rent disputes, the government hopes to rectify any serious issues raised by their active initiatives in future legislative steps and guidelines from the 30th June.

The Code of Practice was introduced in June 2020 and was thought to encourage collaboration between commercial landlords and tenants, allowing parties to reach a satisfactory solution to a problem that has crippled thousands of businesses.

However, businesses on both sides of the landlord-tenant relationship have struggled to account for the impact and the length of the pandemic, and many businesses are now firmly in “survival mode”. The notion of collaborative relations seems a far cry from the adversarial standoffs currently associated with many leased business premises.

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