The Coronavirus Act 2020 granted Welsh Ministers emergency powers to handle the COVID-19 pandemic independently, but this decision brings Wales in-line with England on the changes to the commercial tenancy eviction moratorium.
The Act introduced provisions that a right of re-entry or forfeiture, under a relevant business tenancy, for non-payment of rent, may not be enforced during the moratorium period, now extended until March 2022.
The moratorium provides protection from eviction for commercial tenants in rent arrears and is introduced in order to limit the impact on businesses from the series of lockdowns and trading restrictions imposed on the Welsh economy, as in England, throughout the pandemic.
The UK Government announced an intention to introduce legislation soon which will “ring-fence” commercial rent debt accrued during the pandemic. The idea is that instead of immediately resorting to eviction proceedings, landlords and tenants of business tenancies will be forced to negotiate, falling back on a system of binding arbitration, when agreement between tenants and landlords cannot be reached.
The UK Government recently announced its intention to extended the moratorium in England to 25 March 2022, which gives time for UK Parliament to pass the necessary primary legislation.
The restrictions on the use of commercial rent arrears recovery (CRAR) so that, from the 24 June 2021, the minimum net unpaid rent that must be outstanding before CRAR can be used is 554 days.
The Welsh government’s decision therefore will give the same levels of protection in respect of all these matters for Welsh businesses as those in England, and “will assist with the recovery of Welsh businesses as the economy improves.”
“It will also provide the Welsh Government with what is believed to be sufficient time to continue to work in considering and then where necessary, implementing measures in relation to commercial rent arrears accumulated during the pandemic in Wales. It is expected that this will include working with the UK Government in the further consideration and development of their proposals,” a Welsh government publication by Vaughan Gething MS, Minister for Economy, states.
The 26 August announcement emphasises that the protection provided by section 82 of the Act during the “relevant period” does not remove the requirement to pay rent, and “I am clear that, wherever possible, tenants should of course pay rent,” says the minister.
“This statement is being issued during the Welsh government recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do so,” the minister says.