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Landlords face no income from rent for two years

Landlords whose tenants stopped paying rent at the start of the moratorium in March 2020 are facing the prospect of no income for two years following its extension, says Heather Powell (Partner and Head of Property & Construction).

No other industry has been asked to trade, or support their customers, in a similar way.

It is appalling that the Government continues to treat the opportunist businesses who are generating profits to ignore their landlords and refuse to pay the rent due.

The Government’s announcement means that occupiers of commercial premises – offices, factories, restaurants, cafes and leisure venues – cannot be evicted for not paying their rent until after 25 March 2022.

The Government is asking tenants to pay rent due as soon as restrictions are removed in their sector, if they are not already paying, but this pious hope has no teeth.

The Government needs to remember that landlords provide the infrastructure from which UK Public Limited Companies trade, and from whom investment is required to help UK Public Limited Companies achieve Carbon Zero by 2050.

A more nuanced approach, that genuinely “strikes the right balance” between protecting landlords and supporting businesses most in need is required if all businesses are going to come out of the pandemic ready to meet the challenges of the next ten years.

Plans for a binding arbitration scheme to resolve disputes from March 2022 gives hope to those landlords who have the resources to survive until March 2022, as they may be able to enforce payment of what will be two years overdue rent from tenants who have traded profitably through the pandemic. However, landlords who do not have the cash to do this face fire sales or worse.

Would you like to know more?

If you would like to discuss the above or how it may affect you, please get in touch with your usual Blick Rothenberg contact or Heather Powell, using the details on this page.

For any press queries, please contact David Barzilay whose details are on this page.

You can also visit out Property sector hub for more information.