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Temporary new measures introduced to protect the UK high street from aggressive rent collection and closure

The Government has pledged an unprecedented package of support for retail businesses, which are affected by coronavirus. These temporary new measures are aimed at safeguarding the UK high street businesses and their employees and include ways of protecting retailers from aggressive rent collection tactics as well as giving extra protection with bans on evictions if rent payments are missed. In many situations landlords and tenants are working together to reach agreements on debt obligations but a small minority are not and in the latest article from the Retail Mutual, we look in more detail at the measures that the Government has put in place to protect high-street businesses from eviction.

The Business Secretary, Alok Sharma, has pledged that retailers who are feeling the strain will be asked to pay what they can towards their rent and will be protected from aggressive debt recovery tactics from landlords. These practices are deemed unfair and statutory demands made between 1 March and end of 2020 will be temporarily banned, as will winding-up petitions presented from 27 April to end of 2020, when a company cannot pay its bills due to coronavirus. These measures will be included in the Corporate Insolvency and Governance Bill. Secondary legislation will also prevent landlords from using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days or more of unpaid rent.

Ban on evictions further extended until end of 2020

The temporary ban on high street businesses’ eviction was previously extended from 30 June 2020 until 30 September and has now been extended until the end of 2020. The new measures are designed for clarity and reassurance for both landlords and their tenants including retail business owners, so that finances can be stabilised and businesses can bounce back.

Click here to read the latest on the measures

Code of practice established for commercial property relationships during the COVID-19 pandemic

The government has also established a code of practice backed by a number of bodies including the British Retail Consortium and UKHospitality to help negotiations between tenants and landlords. This is designed to help commercial landlords and tenants map out plans for economic recovery during the coronavirus pandemic. It will provide clarity when rental payments are being discussed and will encourage best practices to support every part of the chain.

Retail business owners should still pay their rents if they can

Tenants are still being encouraged to pay their rent in full if at all possible and where businesses are struggling both landlords and tenants should continue to work together to agree rent payment options. Transparency is advocated in discussions between landlords and their tenants with landlords being asked to behave responsibly and to recognise the serious impact coronavirus has had on the finances of retail business owners.

The Code of Practice has been produced to help guide and encourage all parties to work together to protect viable businesses. Click here to read the Code of Practice.

Chief Executive of the British Retail Consortium, Helen Dickinson OBE:

“The ongoing pandemic presents an enormous threat to the survival of thousands of retailers, and the millions of jobs they support. The necessary closure of most shops during lockdown has created a gaping hole in many retailers’ finances. This has been exacerbated by continued rent demands on stores around the country, even where most have been closed for business. A solution is needed.

This code is a first step toward improving the dialogue between retailers and their landlords. An extension to tenant protections against aggressive behaviour from some landlords is essential to underpin it, and we warmly welcome the government’s commitment to this.”

CEO of UK Hospitality, Kate Nicholls said:

“The near-total wipeout of income from the hospitality sector has left it unable to meet its rent obligations. This code goes some way to bringing together landlord and tenant in the pursuit of a negotiated solution to allow hospitality businesses to move on and revert to the new normal, but this must be recognised as a first step that needs to be built on by all parties.

We remain of the view that further time and support is needed to facilitate a recovery for the hospitality sector, that is at the heart of our social lives and communities. The extension of the moratorium on aggressive enforcement and forfeiture is a welcome measure to allow this process to take place.”

What can The Retail Mutual do for your business?

The Retail Mutual understands that this is a difficult and frustrating time for retail business owners and recognises the pressure they may be under to pay their rents. The Government has acted swiftly and with the extension of measures continues to help tenants, as many retail businesses suffered closures and losses during the coronavirus pandemic.

At The Retail Mutual, we have created a dedicated resource hub. This includes useful Government information and links, and a range of informative articles to help you navigate your way through the pandemic.

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