End of rental moratorium could see court action or locks changed

09 September 2020 by
End of rental moratorium could see court action or locks changed

With the moratorium on landlords taking action over unpaid rent due to come to end this month commercial tenants in arrears will soon be faced with the prospect of lengthy court proceedings or even property owners changing the locks.

The government introduced the moratorium as the Covid-19 pandemic saw the country plunged into lockdown and has repeatedly encouraged landlords and their tenants to reach agreements to share the burden of the virus.

However, despite UKHospitality, the British Property Federation, British Retail Consortium, Revo and ukactive uniting in a plea for the government to issue grants to cover 50% of unpaid rents across retail, leisure and hospitality for six months, the Treasury has not been forthcoming with further aid.

Chloe Benson, senior associate at law firm Goodman Derrick LLP, said it remained in the interests of tenants and landlords to reach agreements, with the later likely to find it difficult to find new tenants under the current circumstances.

However, she added that the lifting of the moratorium would mean landlords wanting to take back properties have the option of pursuing an eviction through the courts or through peaceable re-entry.

Any court proceedings are likely to be long-winded, Benson explained, with delays in place following the closure for all but essential proceedings during the Covid-19 closure, as well as exposing parties to the risks of escalating costs.

Benson explains: "Looking to court proceedings, given there's going to be a considerable backlog I could imagine landlords thinking ‘I don't want to have to wait for a hearing date, I'm just going to go in and change the locks and exercise my rights there by peaceable re-entry' and obviously tenants need to be aware that's a course of action that landlords can take."

The coming weeks will see further calls for the moratorium to be extended, with UKHospitality having earlier suggested it remain in place until the end of the year.

Chief executive Kate Nicholls had said: "It is now the only option if we want to avoid widespread business failures. The government must consider supporting hospitality businesses who cannot pay rent."

The British Retail Consortium (BRC) has also warned that without action on rents further job losses will be seen.

Picture: Shutterstock

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking