CRAR and forfeiture moratorium extended to 25 March 2022
On 16th June 2021, the Government announced that it will be extending the moratorium on the forfeiture of a commercial lease and CRAR (commercial rent arrears recovery) until 25th March 2022.
Their main objective in doing so is to protect jobs, by allowing businesses to continue to trade when they are struggling to pay their rent.
When the moratorium was first introduced last year, the Government encouraged landlords and tenants to resolve debt issues through negotiation or arbitration.
There was a call for evidence in April this year and, as a result, the Government now plans legislation, to be introduced in the current session of parliament, to support the orderly resolution of such debts. It will include a backstop: when negotiation is not successful, both parties will be required to undertake compulsory arbitration.
The Government stated today that tenants should start to pay rent either in accordance with their lease or with the arrangements they have agreed with their landlord.
There is an alternative option for the recovery of commercial rent arrears, which may be worth considering, and that is to raise a claim in the county court for the arrears and then transfer the judgment to the High Court for enforcement under a writ of control.
The writ will be valid for 12 months and does mean that the enforcement agent may also take control of goods at other sites where the tenant operates, not just at the demised premises.