The MIA has been working in partnership with the BRC to provide breathing space to Retailers struggling to cope with the burden of debts incurred during closures as a result of lockdown measures.
The moratorium on enforcing rent arrears was due to end in England on the 30th June, but the Chief Secretary to the Treasury, Stephen Barclay MP recently informed Parliament that this would be extended until the 25th March 2022.
The moratorium currently prohibits landlords from taking the following actions:
- Taking back properties that have arrears (‘lease forfeiture’)
- Sending bailiffs to stores to seize stock to repay arrears (‘Commercial Rent Arrears Recovery’)
- Pushing tenants into insolvency to claim arrears as a creditor (Winding up Petitions)
The Government had been consulting on a replacement for the moratorium, and the MIA took the decision to support the proposal put forward by the BRC which included the following;
- Ring-fencing arrears built up between 24 March 2020 and 30 June 2021 to 31 December 2021
- Including County Court Judgements (CCJs) within the scope of banned measures
- Requiring parties who have not agreed a repayment plan by 31 December 2021 to move to compulsory, binding arbitration under the existing Code of Practice
In his statement the Chief Secretary stated;
“As a result of that call for evidence, the government now plans to introduce legislation to support the orderly resolution of these debts that have resulted from Covid-19 business closures.”
“We will introduce legislation in this parliamentary session to establish a backstop so that where commercial negotiations between tenants and landlords are not successful, tenants and landlords go into binding arbitration.”
“Until that legislation is on the statute book existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to March 25, 2022.”
MIA Executive Director Anthony Short welcomed the announcement;
“We have been concerned for a while that the period of re-opening would be the most challenging for many MI stores”
“With footfall a long way short of pre-pandemic levels, and increasing pressure on securing inventory it will take some time before retailers can trade their way out of the debts that have been accruing during lockdown.”
“This is a positive development that will help give viable retail businesses some breathing space as they navigate a path back to normality”.