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.