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UK Government Extends Ban on Business Evictions and use of CRAR

The UK Government will be extending its eviction protections for struggling businesses until the end of September due to the ongoing economic impacts of the novel coronavirus, COVID-19.

A new code of practice has been developed ensuring that businesses in the property, retail, and hospitality sectors in particular are all supported. This code affects all commercial leases held by businesses in sectors that have been affected by the global pandemic.

This code of practice was put together by the UK government in conjunction with a variety of entities including the British Property Federation, the British Chambers of Commerce, the British Retail Consortium, and several others.

Communities secretary, Rt Hon Robert Jenrick MP was quoted as saying the following:

“We are extending measures to protect those who are unable to pay rent from eviction so that businesses have the security they need to plan for their futures.”

On the new code of practice, he said: “In recognition of the strain that the virus has had on our high streets, our new code – backed by leaders across the industry – will help unlock conversations on rent and future payments whilst ensuring best practice is displayed across the board as we confront the challenges of this pandemic.”

Below is a breakdown of the most important changes to measures for the commercial sector:

  1. Suspension of the forfeiture of evictions extended from June 30th to September 30th

  2. Legislation preventing landlords from the use of Commercial Rent Arrears Recovery extended from June 30th to September 30th unless they are owed 189 days of unpaid rent.

  3. Amendment tabled for Corporate Insolvency and Governance Bill extending temporary ban on use of statutory demands and winding-up petitions (in cases related to the pandemic) until September 30th

Many of these measures were first introduced during March 2020, shortly before the government made its decision to place the UK under lockdown – a move which placed significant restrictions on day-to-day life and work.

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