Government bans ‘aggressive rent collection’ to safeguard high street stores

The Department for Business, Energy and Industrial Strategy (BEIS) said the temporary measures would “safeguard the UK high street against aggressive debt recover actions” during the coronavirus pandemic.

BEIS said it would be temporarily banning landlords from issuing both statutory demands and winding up petitions against occupants that had not paid their rents and would almost be making changes to the use of commercial rent arrears recovery.

It also called on landlords and investors to “work collaboratively” with high street businesses struggling to pay rent on stores forced to close due to the lockdown.

The government urged landlords to “give their tenants the breathing space needed” during this period, but also said occupants that can to “pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too”.

Business secretary Alok Sharma said: “In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic.”

Sharma said he understood that landlords were also struggling due to the pandemic and said the government had expanded its coronavirus business interruption loans scheme to support them.

“Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme.

“I know that like all businesses they are under pressure, but I would urge them to show forbearance to their tenants. I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the Covid-19 emergency continues,” he said.

The announcement follows changes introduced by the government in its coronavirus bill issuing a moratorium on evictions for commercial tenants for at least three months.

Communities secretary Robert Jenrick said the government was “working with banks and investors to see ways to address” liquidity issues being faced by landlords.

BRC chief executive Helen Dickinson welcomed the announcement. She said: “Rents are a huge burden for retailers that must be paid even where shops are closed. We have raised this problem with government and today’s announcement protects firms who – during these extraordinary times – are unable to meet their rent obligations.

“We thank Alok Sharma for his swift action, which will give retailers some vital relief and help safeguard millions of jobs all across the country. We look forward to the finer details, however, it is clear the government is listening and willing to act.”

However, the measures have not been met with universal acclaim. Revo chief executive Vivienne King said the ban on evictions in the coronavirus bill had been exploited by ”well-capitalised businesses” and she was concerned the latest measures would be as well. 

She said: ”A moratorium on winding up petitions and statutory demands removes the incentive of last resort for property owners and there is every reason to fear it will also be used in the same way.

“We urgently call on government to disabuse this misinterpretation and instead, back the proposal offered by Revo, the British Property Federation and the BRC to underwrite rents in support of retailers, property owners and their lenders through what is a desperate time for the high street.”