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More temporary protection

The restrictions imposed by the UK government in order to prevent the spread of coronavirus continue but so, too, will measures to be introduced to, it is hoped, assist some businesses.

As we said in March 2020, business tenants have been given temporary protection from forfeiture for non-payment of rent (s82 of the Coronavirus Act, 2020). This protection presently extends to 30 June 2020. Additionally, on 23 April the Ministry of Housing, Communities & Local Government and the Department for Business, Energy & Industrial Strategy issued a joint statement saying “High street shops and other companies under strain will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic.”

The statement records that whilst the majority of landlords and tenants are working together to reach agreements on debt obligations, some landlords have been putting their tenants under undue pressure by using aggressive debt recovery tactics. To prevent this, if a company cannot pay its bills due to coronavirus, the government will temporarily prevent the use of statutory demands made between 1 March 2020 and 30 June 2020 and the issuing of winding up petitions presented from 27 April 2020 to 30 June 2020. The measures are to be included in the Corporate Insolvency and Governance Bill. Secondary legislation will provide tenants with “more breathing space” by preventing landlords from using the Commercial Rent Arrears Recovery (‘CRAR’) scheme unless they are owed 90 days of unpaid rent.

Communities Secretary, Robert Jenrick said the government is doing everything it can to ensure commercial tenants are as well placed as possible to get back to business after the lock down. However, he recognized that landlords, too, are facing very serious pressures and thus the government is “working with banks and investors to seek ways to address these issues and guide the whole sector through the pandemic.

The British Retail Consortium and UK Hospitality welcome the measures but emphasize they may need to be extended to ensure businesses can survive.

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