New measures help shops with their rent during coronavirus pandemic

Commercial landlords will be stopped from using aggressive methods to collect rent from High Street retailers during the coronavirus lockdown following new measures announced by the Government. 

These new laws, announced by Business Secretary Alok Sharma on 23rd April, prevent landlords from using statutory demands and winding up orders to claim rent unpaid due to the COVID-19 outbreak. 

Tenants of commercial properties also have the option of delaying full payments, unless they owe more than 90 days of unpaid rent. 

It is hoped these new measures will help to safeguard the UK High Street and the millions of staff they employ. 

Mr 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. 

“I know that like all businesses, [commercial landlords] 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.” 

On 25th March, the Government introduced the Coronavirus Act 2020, which included banning the forfeiture of commercial leases until 30th June 2020 – or longer if the Government decides it necessary – for non-payment of rent. 

However, that law did not stop landlords from using other means in order to claim unpaid rent, such as using statutory demands, Commercial Rent Arrears Recovery (CRAR) or issuing orders to begin winding up proceedings. 

When it announced the new tenant protection measures, the Government stated it understands the pressures facing commercial landlords and is working with banks and investors to address those issues. 

Mr Sharma added: “The temporary emergency measures are designed to acknowledge the pressures landlords are facing while encouraging cooperation in the spirit of fair commercial practice. 

“They also come on top of a substantial package of business support measures, including a moratorium on evictions for commercial tenants for at least a three-month period." 

Chief Executive of the British Retail Consortium, Helen Dickinson OBE, said: “Rents are a huge burden for retailers that must be paid even where shops are closed. We have raised this problem with Government and this announcement protects firms who – during these extraordinary times – are unable to meet their rent obligations.” 

Andrew Goodacre, Bira’s CEO, said: “Bira members have told us how frustrated they have been by the lack of support and help by many landlords.  

“We are pleased to see the Government take this action which will be a relief to many independent retailers who already have a lot of problems to deal with.  

“We raised the concerns of our members and we are pleased to see that the Government has taken notice.” 

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Date published 27 Apr 2020 | Last updated 25 Sep 2020