A raft of commercial landlords are considering launching legal action against the government after it extended its business eviction ban until March 2022.
The British Property Federation, a lobby group for commercial landlords, is looking at all legal options as there is now an estimated £6bn in unpaid rents throughout Covid-19.
Chief secretary of the Treasury Steve Barclay announced on Wednesday that the government was establishing a new “backstop” for commercial landlords and tenants to negotiate unpaid rents stemming from Covid-19.
He said the moratorium on business evictions would be extended until this was in place – March 2022.
Speaking to the Sunday Times, the British Property Federation (BPF) chief executive Melanie Leech, said: “How can it possibly be proportionate or a good use of taxpayers’ money to create a whole new scheme to intervene in contract law when you have the courts there to do that?”
The moratorium on evictions has meant some high profile retailers – such a Boots, JD Sports and Sports Direct – have not paid rent during the pandemic.
After the new extension, the commercial eviction ban will have been in place for two years.
The eviction ban was originally extended to the end of June 2021 to fit in with plans to get rid of final social distancing rules in line with the government’s roadmap out of lockdown.
Businesses that are still unable to operate at full capacity, like pubs, restaurants and theatres, and therefore struggling to make profit, will particularly benefit from the decision.
Barclay said his announcement on Wednesday “strikes the right balance between protecting landlords and supporting those businesses that are most in need”.
“It sets out a long term solution to the resolution to Covid-19 rent, ensuring that many businesses can continue to operate and that debts accrued during the pandemic are quickly resolved to mutual benefit,” he said.