Jun 22, 2020
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UK extends ban on evicting high street stores over rent non-payment

Jun 22, 2020

The property sector may be reeling from rents having not been paid for months, but the UK government has focused on supporting under-pressure retailers and has extended its ban on evictions for non-payment of rent until this autumn.

Footfall may be returning to shops but rent bills remain a hurdle

The measure had been originally planned to run until June 30 but has now been extended until the end of September, which means that retailers with little-to-no cash flow won't be faced with losing their stores if they're unable to pay their rents.

Business Secretary Alok Sharma said: “From clothes stores to our local book shop, we want as many high street businesses as possible to emerge from the pandemic, in the best position to bounce back. During this particularly challenging time for businesses, our retail stores are safely welcoming shoppers back and taking the necessary steps to drive economic recovery.

“By putting a stop to unreasonable evictions, these measures will protect jobs and provide further flexibility to our high street businesses that were trading successfully before the Covid-19 emergency, so they can focus on continuing to deliver for their customers and communities.”

And as talks between retailers and the landlords over rents become increasingly tense, the government has also published a code of practice. 

Many rents were due imminently on the so-called quarter day when commercial rents are traditionally paid in the UK.

But a big number of retailers didn't pay the rent bill that was due three months ago and with their shops having been shut ever since, they're even less able to do so for the latest quarter.

The government’s new code of practice has been “developed with leaders from the retail, hospitality and property sectors to provide clarity for businesses when discussing rental payments and to encourage best practice so that all parties are supported”.

It’s aiming to “help unlock conversations on rent and future payments whilst ensuring best practice is displayed across the board as we confront the challenges of this pandemic”. It encourages retailers to pay what they can and to pay in full if they’re able to. Landlords are being encouraged to be supportive and both sides are meant to be as transparent as they can. It also contains measures such as rent holidays, monthly rent payments and reductions in service charges being passed on to tenants. 

However, the code is voluntary and Helen Dickinson, chief executive of the British Retail Consortium, said it offers no help for those stores that are “simply unable to pay what is being demanded”.

The non-eviction measure will bring relief to a large number of retailers that can’t pay their rent, but property owners, which have also been faced with cash flow problems as a result, have complained that some big businesses are withholding rent when they could afford to pay.

It's undeniable that many well capitalised international businesses have been refusing to pay rents that they could have afforded during the lockdown. But there's no avoiding the fact that paying rent on shops that aren’t allowed to open and paying service charges when no services are being provided would be a problem even for the most affluent companies.

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