29th April 2021
Government seeks views on pandemic’s impact on rental arrears.
A government survey looking into the impact of Covid-19 on commercial rent debts is set to close next week.
The existing protections for defaulting tenants which currently prevent landlords from forfeiting the lease for rent arrears, proceeding with commercial rent arrears recovery (CRAR), or presenting a winding up petition (unless coronavirus has not had a financial effect) are to end on 30 June 2021.
Considering the potential significant consequences of the numbers of defaulting tenants, the government is seeking views on how to manage rental debts.
Tenant businesses, commercial landlords and anyone with an interest or connection to the commercial property market will have an opportunity to present their views via a survey.
The survey outlines six options for possible exit strategies after 30 June 2021. This includes allowing current measures to end and proceed on a business-as-usual basis, the implementation of further extensions to businesses who have suffered as a result of the pandemic, and proposed methods of alternative dispute resolution. The survey – which closes on 4 May 2021 - can be accessed here.
In addition to the survey, the government has introduced the Debt Respite Scheme, which is set to take effect from 4 May 2021. The scheme allows defaulting tenants to apply for a moratorium of up to 60 days to shield from creditors’ (including landlords) enforcement action. Further details can be found here.
To discuss this matter further, or if you any query relating to the government’s survey, please contact Matthew Smith or another member of Thrings’ specialist Property Litigation team.