Relief for tenants and CIGA extended - yet again

The Government has today announced certain extensions to insolvency measures supporting businesses during the pandemic.

For tenants, the forfeiture moratorium and restrictions on the landlord recourse to the Commercial Rent Arrears Recovery process have been extended to 25 March 2022. Businesses that have had to remain closed during the coronavirus pandemic and are consequently unable to pay rent on their commercial property will continue to be protected from eviction and CRAR recovery. 

The Government has announced that legislation will be introduced in this session to ring fence outstanding unpaid rent that has built up when a business has had to remain closed during the pandemic. The Government expects landlords to make allowances for the ring fenced rent arrears from these specific periods of closure due to the pandemic, and share the financial impact with their tenants.

It is stated that this will help tenants and landlords work together to come to an agreement on how to handle the money owed – including by waiving some of the total amount or agreeing a longer-term repayment plan.

This agreement should be between the tenant and landlord and, if in some cases, an agreement cannot be made, the law will provide for a binding arbitration process so that both parties are bound into a formal agreement. 

In order to ensure landlords are protected, the government is making clear that businesses who are able to pay rent, must do so. Tenants should will therefore need to start paying their rent as soon as restrictions change, and they are given the green light to open. The extension applies to all businesses, but the new measures that will be introduced by primary legislation will only cover those impacted by closures. This means that rent debt accumulated before March 2020 and after the date when relevant sector restrictions on trading are lifted, will be actionable by landlords as soon as the tenant protection measures are lifted. 

https://www.gov.uk/government/news/eviction-protection-extended-for-businesses-most-in-need

In addition, further insolvency measures are being extended until 30 September 2021 - https://www.gov.uk/government/news/government-extends-business-support-measures

• Statutory demands and winding-up petitions will continue to be restricted (although winding-petitions can continue to be presented where the insolvency is unrelated to the coronavirus pandemic) up to 30 September 2021.
• Entry into a moratorium will continue to remain relaxed and a company will be able to enter a moratorium if they have been subject to an insolvency procedure in the previous 12 months (this was already extended out to 30 September 2021 previously).
• It is not clear if the temporary exclusion for small suppliers from the ipso facto regime will be extended or that the temporary relaxation of the wrongful trading rules will be extended - both of which are due to expire on 30 June 2021.