Rent statutory demands and wind-up notices banned by Government

By Nikkie Thatcher

- Last updated on GMT

Support provision: the Government has taken measures to help commercial tenants during the coronavirus outbreak
Support provision: the Government has taken measures to help commercial tenants during the coronavirus outbreak

Related tags: Coronavirus

The Government is set to temporarily void statutory demands and winding-up petitions issued to commercial tenants amid the coronavirus pandemic.

These measures, which are to aid businesses that cannot pay bills due to coronavirus and help ensure they do not fall into deeper financial strain, will be included in the Corporate Insolvency & Governance Bill, which the business secretary Alok Sharma set out earlier this month.

The Government is also setting out secondary legislation in a bid to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery unless they are owed 90 or more days of unpaid rent.

However, while landlords are being called upon to give their tenants more breathing space if required, the Government has also urged tenants to pay rent where they can afford to or what they can in recognition of the strains felt by commercial landlords too.

Extra protection

UKHospitality (UKH) chief executive Kate Nicholls hailed this decision as a “very helpful and pragmatic response” and said it would give hospitality businesses “some very valuable breathing room”.

She said: “UKH has pushed the Government to provide extra protection for businesses, so it is good to see positive action.

“Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for a significant number.”

Curb aggressive behaviour

Nicholls added: “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, this measure must be extended to ensure businesses can survive. A cancellation of existing sanctions is also very welcome.

“The majority of landlords have understood the challenges the sector has faced but these measures were much needed to curb the aggressive behaviour of others, which if left unchecked, threaten hundreds of thousands of jobs.”

Related topics: Property law, UnitedWeStand

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