A call for evidence on rent debts has been published, focusing on the moratorium on commercial lease evictions and the restrictions on the use of Commercial Rent Arrears Recovery (CRAR).
Although current measures are temporary and should not continue indefinitely, a “carefully managed exit” was necessary to protect businesses and jobs, the consultation said.
The consultation does not form part of the Government review into the commercial landlord and tenant relationship, announced in November 2020.
With hospitality rent debt topping £2bn, UKHospitality CEO Kate Nicholls said it was “very positive” that the Government was considering additional measures in the commercial lease market.
Nicholls added: “This level of debt simply cannot be paid off in the short-term. There must be sustained and targeted support to allow tenants and landlords to reach agreement. This must include measures from landlords to write off a level of Covid-related debt.
“It is encouraging the Government has recognised uncertainty over reopening dates has made it almost impossible to find agreement, and even after reopening it will take time for businesses in sectors like hospitality to return to pre-pandemic trading levels."
Options under consideration include:
- Allowing an expiration of current protection measures on 30 June 2021.
- Allowing the moratorium on commercial lease forfeiture to lapse on 30 June 2021 but retain the insolvency measures and additional rent arrears amendments to CRAR for a period of time
- Targeting existing measures to businesses based on the impact that Covid restrictions have had on their businesses for a limited period of time
- Encouraging increased formal mediation between landlords and tenants
- Encouraging non-binding adjudication between landlords and tenants
- Enforcing binding non-judicial adjudication between landlords and tenants.
The call for evidence closes on 4 May at 11.59pm and can be completed here.