Coronavirus: Government to publish high street code of conduct on rental payments

The Ministry of Housing, Communities and Local Government said the code would be a “boost to the high street” and would foster discussions between landlords and tenants over “rental payments during the coronavirus pandemic” and offer “guidance on rent arrear payments and treatment of subletters and suppliers”.

The working group would “seek to involve wider business input through its sector members” to ensure the widest possible consultation on the wording of the future code, the government said.

Communities secretary Robert Jenrick said the code would offer “clarity to landlords and tenants who are both facing equal pressures on their finances, so they are all able to stabilise their finances and bounce back”.

The code will be temporary at first, although the government said it would “explore options to make it mandatory if necessary”.

The closure of all non-essential retail stores at the end of March coincided with second-quarter rent dates for many retailers, and landlords reported historically low returns as a result. Many retail businesses sought deferments on rents from landlords, or simply outright refused to pay.

There are growing concerns in the landlord community in particular about even lower rental payments for the third quarter, which are due on June 24.

While the government has provisionally set a date for reopening non-essential retail stores from June 15, many retailers are concerned about the impact social distancing measures will have on store profitability and are looking to implement more phased approaches to resuming bricks-and-mortar trading.

Chief executive of Revo Vivienne King said the representative group “fully supports” the establishment of the code, but warned against it “cutting across existing contractual agreements and undermining the spirit of collaboration” between retailers and landlords.

“The code of conduct is an approach to managing behaviours and must be underpinned by the fundamental principle that those businesses that can pay should pay. By equal measure, those property owners that can provide support to businesses in distress should do so.

“We have pressed for the code to be a voluntary framework, providing both parties with the flexibility to create solutions suited to the circumstances. If it is too rigid, there is the risk it interferes with the stability of existing contractual agreements and undermines the collaborative spirit that is emerging as many retailers and property owners try to find new ways of working together.”