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The Business Secretary set out plans on 23rd April 2020 to protect high street businesses from “aggressive rent collection.” As a result of the new measures, statutory demands and winding up petitions issued to commercial tenants will be temporarily voided and changes will be made to the use of Commercial Rent Arrears Recovery, building on measures already introduced in the Coronavirus Act.
Whilst it’s believe that the majority of landlords and tenants are working in cohesion to reach rent agreements; the government will temporarily ban the use of statutory demands (made between 1st March 202 and 30th June 2020) and winding up petitions presented from Monday 27th April, through to 30th June, where a company cannot pay its bill due to coronavirus.
This will further safeguard the high street and millions of jobs by helping to protect them from permanent closure during this time. However, while landlords are urged to give their tenants the breathing space needed, the government calls on tenants to pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too.
Business Secretary, Alok Sharma, said:
In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic.
Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme.
I know that like all businesses they are under pressure, but I would urge them to show forbearance to their tenants. I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the COVID-19 emergency continues.”
Chief Executive of UK Hospitality, Kate Nicholls, said:
This is a very helpful and pragmatic response from the Secretary of State and will give hospitality businesses some very valuable breathing room.
Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for some. This extra space will allow businesses to survive and to find a way to work with landlords. If social distancing measures are to be in place for some time, as we now believe they will, this measure may need to be extended to ensure that businesses can survive.”