February 23, 2021

Lease Forfeiture Moratorium To Be Extended Beyond March

Government ministers are planning to extend the lease forfeiture moratorium beyond the end of March, according to reports.

The Times reports that both the business department and the Ministry of Housing, Communities and Local Government (MHCLG) have been talking to the property, retail and hospitality sectors over how best to extend the moratorium, which prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the COVID-19 pandemic.

The moratorium is currently due to expire at the end of March, by which point it is understood that there will be nearly £3 billion in rent arrears accumulated within the hospitality sector alone as a result of the closers due to the pandemic.

UKHospitality has stated that 40 per cent of businesses within the sector have not received any rent concessions from landlords.

The Government may also introduce guidance on how landlords and their tenants should determine how bills are split.

Bill Hughes from the Property Industry Alliance said: “There is every chance [the moratorium] will be extended. The Government is now distinguishing between leisure and hospitality, which have been hit very hard, and retail, which is more of a mixed bag.”

When first introduced in March 2020, the lease forfeiture moratorium was originally intended to be in place for three months.

However, it has been extended in quarterly increments alongside other protections introduced in May, which have restricted landlords from pursuing aggressive forms of rent recovery such as statutory demands and winding-up petitions.

The MHCLG is expected to clarify the new rules on evictions and rent collection in the coming weeks, with any significant changes potentially requiring primary legislation to be passed.

“Throughout the pandemic, we have provided an unprecedented £280 billion package of economic support, while supporting businesses and high streets, as well as safeguarding millions of jobs,” the Government said.

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