Landlords had written to the Government in a plea to allow them to aggressively collect rent again. However, the moratorium on legal action by landlords against tenants that have been unable to pay rent due to Coronavirus has been extended until 31st March 2021.
The Government said this “final extension” to offer protection from the threat of eviction will give landlords and tenants three months to come to an agreement on unpaid rent. The government said the majority of commercial landlords have shown “flexibility, understanding and commitment to protect businesses during an exceptionally challenging time”. Communities secretary Robert Jenrick said: “This support is for the businesses struggling the most during the pandemic, such as those in hospitality, however, those that are able to pay their rent should do so.
The British Property Federation have said that the inability of them to collect rent has ““undermining the UK’s attractiveness” as a place to invest in property and development, which could undermine the recovery.
Large property firms like Hammerson have struggled to collect rent from their shopping centres and have joined the call to relax the restrictions.
Melanie Leech, chief executive of the BPF, accused “large, financially sophisticated and well-capitalised businesses” of abusing the moratorium by withholding rent to improve their liquidity. She added that income from more robust businesses was essential so that the landlords could extend help to more vulnerable tenants like independent traders and boutique retailers.
A war or words has erupted between the boss of JD Sports, Peter Cowgill, who is critical of landlords that are not prepared to negotiate on rents saying that between 2007 and 2015 they increased rents above inflation and now the “boot was on the other foot” and they had to get real.
Rental income is an important part of the functioning of the financial system as it is needed to pay dividends to pension holders and shareholders as a return on money tied up in physical assets.
It should be noted that the rental liabilities have not completely gone away and the landlords may well be able to recover rents under their leases at a later date. Whether the money is there is another question!