The Government has blocked commercial landlords from evicting small businesses from shops and other premises for another three months until end-September.

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The U-turn will come as a huge relief for small businesses struggling to pay rent as businesses reopen post lockdown to uncertain, if non-existent, demand.

Up until yesterday, the draft voluntary code of practice being circulated made no mention of extending the original three-month moratorium on landlords repossessing premises and evicting tenants for non-payment of rent due to Covid-19.

>See also: How to ask for a commercial rent freeze from your landlord

  • The Government will amend the Coronavirus Act to extend the moratorium on evictions from June 30 to September 30, meaning no business will be forced out of their premises if they a miss a payment in the next three months.
  • Secondary legislation will prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent
  • The Corporate Insolvency and Governance Bill will be amended, extending the temporary ban on the use of statutory demands and winding-up petitions where a company cannot pay its bills due to coronavirus until September 30

However, the draft code of practice encourages tenants to continue to pay their rent in full if can do so, and advises that others should pay what they can, while acknowledging that landlords should provide support to businesses if they too are in a position to do so.

You can read the draft code of practice here.

Extending measures

Robert Jenrick, the communities secretary, said: “We are extending measures to protect those who are unable to pay rent from eviction so that businesses have the security they need to plan for their futures.”

Responding to three-month non-payment extension, Federation of Small Businesses national chairman Mike Cherry said: “After months of little or no revenue coming in, delivery of the new moratorium that we’ve been calling for will come as a great relief to many small firms. A voluntary code was never going to be enough.”

However, Cherry said there was every chance that three-month moratorium extension will need to be extended further.

And Scott Goldstein, a partner at solicitors Payne Hicks Beach, said that the proposal to resolve rent disputes, although commendable, is hardly likely to achieve the swift result that a landlord struggling with its own commitments needs.