The government's announcement to extend the moratorium on forfeiture for non-payment of rent for a further nine months to 25 March 2022 was as welcome as a bull in a china shop for landlords but provided much needed respite for tenants.
There is always a balance to be struck between the interests of both parties and the government's announcement of course applies across the board, it doesn't (and could not) take into account circumstances of individual cases where tenants who could have paid rent chose not to do so. I have seen such situations arise and landlords will understandably feel aggrieved when its primary weapon of enforcement is curtailed until March 2022.
There are other options for landlords
- If they are of the view that the tenant has had the funds to pay the rent but has simply not done so then the landlord can seek a court judgment against the tenant and pursue recovery. If however, the tenant has genuinely struggled financially during the pandemic then such an option might be a case of throwing good money after bad.
- If there is a rent deposit, the landlord could look to draw down on it.
- If there is a guarantor or former tenants who remain on the hook the landlord could pursue them.
From 30 September 2021, landlords have another optionFrom the 30 September 2021 the moratorium on statutory demands and winding up petitions is due to end which gives landlords another option of enforcement.
Going forward there is planned new legislation wherein rent arrears accrued by tenants who have not been able to operate due to the pandemic will be ring-fenced. The parties will be expected to discuss an agreement in respect of the arrears, including write-offs and long term payment plans. If agreement cannot be reached there will be a binding arbitration scheme introduced to resolve the dispute, it is intended that this will be in place before the moratorium ends in March 2022.
This is a landscape where there has been a lot of suffering on both sides during the pandemic. All parties have been in a lose-lose situation for the most part but perhaps a more balanced approach to the extension of the moratorium would have been to apply it to certain sectors hardest hit, such as the hospitality sector, if at all possible.
A ban on landlords evicting firms for unpaid commercial rent is being extended for another nine months.