The government has surprised observers by announcing that compulsory mediation over Covid-related arrears would happen in the commercial sector – but not the residential market.

Speculation in at least one national newspaper suggested the government would make mediation compulsory across both the residential and commercial sectors.

However, the Chief Secretary to the Treasury, Steve Barclay, has told MPs that the ban on commercial evictions – which had been set to end on June 30 – would be extended into March 2022.

A new and binding arbitration mechanism would be introduced introduced to help commercial tenants and landlords resolve disputes over Covid-related arrears.

However, no mention was made of a similar mandatory arbitration to settle disputes between landlords and tenants in the residential sphere.

“We will introduce legislation in this parliament session to establish a backstop so that where commercial negotiations between tenants and landlords are not successful, they go into binding arbitration” Barclay told MPs.

“Until that legislation is on the statute book existent measures will stay in place, including extending the existing moratorium in place to protect tenants from eviction to March 2022.

“All tenants should start to pay rent again in accordance with the terms of their lease or as otherwise agreed with their landlord.”

The commercial sector eviction ban was introduced in April last year, originally until September 2020. It was then extended to the end of this month – and now expires on March 25 2022.