The government has published a new code of practice, developed with leaders from the retail, hospitality and property sectors, to encourage commercial tenants and landlords to work together to protect businesses.
This code applies to all commercial leases held by businesses which have been seriously negatively impacted by the COVID-19 crisis, whether, for example, in the hospitality, retail, leisure, office, industrial and logistics, ports, or rural sectors.
The code is designed to encourage tenants and landlords to be transparent in their discussions and to come to a mutually beneficial rental agreement. It recognises that tenant/landlord relationships will be required to respond to circumstances differently and therefore the code is voluntary in its nature.
It encourages tenants to continue to pay their rent in full if they are able to do so, whilst also recognising that landlords should support businesses where possible. Tenants who are unable to pay in full should seek agreement with their landlord to pay what they can taking into account the principles of the code.
Additional changes to the existing package of measures for the commercial sector include:
- A statutory instrument to amend the Coronavirus Act to extend the time period for suspension of the forfeiture of evictions from June 30 to September 30, meaning no business will be forced out of their premises if they miss a payment in the next three months;
- Secondary legislation to prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent. The time period for which this measure is in force will be extended from June 30 to September 30; and
- An amendment to the Corporate Insolvency and Governance Bill has been tabled which will extend the temporary ban on the use of statutory demands and winding-up petitions where a company cannot pay its bills due to coronavirus until 30 September.