New measures to protect commercial tenants will provide valuable breathing space for foodservice operators.
New measures to protect commercial tenants – including swathes of bars and restaurants that are currently closed and have no revenue to fund rent payments to landlords – are set to provide much-needed relief for operators.
The government yesterday laid out an action plan to prevent aggressive rent collection in the wider commercial sector.
The measures will temporarily ban the use of statutory demands and winding up orders where the non-payment is due to Covid-19.
The government is also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.
UKHospitality chief executive Kate Nicholls called it a “very helpful and pragmatic response” from the government and said it would give hospitality businesses valuable breathing room.
“Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for a significant number.
“This is likely to be the case for the rest of the year and further government action is required to address this for the next nine months.
“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 must be extended to ensure that businesses can survive. A cancellation of existing sanctions is also very welcome.”
Ms Nicholls said that while the majority of landlords have understood the challenges the sector has faced, the new measures would help curb the aggressive behaviour of others which, if left unchecked, potentially threaten hundreds of thousands of jobs.