The unprecedented disruption caused by the coronavirus (COVID-19) pandemic is putting more pressure on commercial tenants than ever before as they are left with decimated income streams and a continuing obligation to pay rent. In a move to protect high street retailers and other companies, the UK government has introduced temporary new measures to prevent heavy-handed commercial landlords taking aggressive debt recovery action against tenants who are already struggling to pay rent during the pandemic.
These measures include temporarily banning the use of statutory demands, winding up and the use of the commercial rent arrears recovery procedure unless 90 days or more of unpaid rent is owed.
The aim of these new measures is to give tenants more breathing space to pay rent and to keep their businesses afloat so that they can continue to provide jobs and avoid prevent permanent closure beyond the COVID-19 emergency. The government also recognises the strain felt by commercial landlords and have extended their support to landlords through the Coronavirus Business Interruption Loan Scheme (CBILS).
The underlying message from the government is clear – commercial landlords and tenants should continue to work together to reach agreements on debt obligations whilst respecting their own unique difficulties. Tenants should pay rent where they can afford it in recognition of the strains felt by commercial landlords, and landlords should avoid using aggressive debt recovery tactics. It is in the interest of both parties that alternative payment arrangements are agreed as tenants will want to continue operating and landlords will want their premises to continue to be occupied beyond the pandemic.
