Ban on evictions for commercial tenants who miss rent payments

by Property 118

8:54 AM, 24th March 2020
About 7 months ago

Ban on evictions for commercial tenants who miss rent payments

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Ban on evictions for commercial tenants who miss rent payments

Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction, the government has announced.

Many landlords and tenants are already having conversations and reaching voluntary arrangements about rental payments due shortly but the Government recognises businesses struggling with their cashflow due to coronavirus remain worried about eviction.

These measures, included in the emergency Coronavirus Bill currently going through Parliament, will mean no business will be forced out of their premises if they miss a payment in the next three months.

This builds on the unprecedented package of support announced for businesses who are affected by coronavirus.

As commercial tenants will still be liable for the rent after this period, the Government is also actively monitoring the impact on commercial landlords’ cash flow and continues to be in dialogue with them.

Communities Secretary, Rt Hon Robert Jenrick MP, said: “We are protecting both people and their businesses by providing the urgent support they need.

“We know many commercial landlords are already setting a great example by working closely with tenants and offering rent deferrals or holidays.

“However, these new measures will provide reassurance to businesses struggling with cashflows and ensure no commercial tenant is evicted if they cannot pay their rent because of coronavirus over the next three months.”

The Chancellor of the Exchequer, Rishi Sunak MP, said: “We are taking unprecedented action and doing so at unprecedented speed, because we know that businesses and their employees need help now.

“That is why we are taking steps to change the law so that no company can be forced out of its premises due to loss of income. Alongside our support for workers and £330 billion of business loans and guarantees, this will help make a real difference to firms across the country trying to protect jobs.”

Business Secretary, Alok Sharma MP said: “This measure will provide companies with an essential safeguard in these highly unusual times as they deal with the impact of coronavirus.

“This is part of the unprecedented package of support we have put in place to protect jobs and livelihoods right across the country.”

Mike Cherry, Federation of Small Businesses National Chairman, said: “Small businesses will wholeheartedly welcome the decision to ban evictions for commercial tenants for three months.

“This will give piece of mind to millions of small businesses who are desperately struggling with their cash flow.

“We know sensible conversations between landlords and commercial tenants are taking place – but having this legislative backstop to prevent evictions during the worst of the crisis will provide much needed peace of mind for many small businesses.”

The Coronavirus Bill also includes new measures to ensure that Business Improvement  Districts (BID) are equipped to continue their vital role in managing the impact of the crisis on local economies and helping town centres and high streets recover.

To ensure no area loses its Business Improvement District at this critical time, emergency legislation will allow a delay to ballots between now and 31 December 2020 until March 2021. This will ensure that they are conducted in a safe and effective way.

Simon Quin, High Streets Task Force Executive Director, said: “These are important steps that will strengthen town centres and commercial areas as they prepare for the future.

“They will encourage retention of occupancy and ensure Business Improvement Districts can focus on support for their local areas through the emergency and into recovery. This will make places more resilient.”

Further information

The amendment to the Coronavirus Bill on commercial leases will apply to England, Wales and Northern Ireland. It applied to all commercial tenants.

We will, of course, be working with the Devolved Administrations, including Scotland, across our coronavirus response.

The change will come into force when the Coronavirus Bill receives Royal Assent. It will last until 30 June, with an option for the government to extend if needed.

The new business information campaign has gone live with updated information available.


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Comments

BP Surrey

9:12 AM, 24th March 2020
About 7 months ago

Everyone seems to be getting financial support apart from pensioners like me who rely on the rental income from residential and commercial properties they own.

Tim Jones

9:21 AM, 24th March 2020
About 7 months ago

I’m a trustee ( finance director ) of a chain of 30 charity shops - all are profitable and do well, obviously we have just closed and therefore income is zero . I’m wondering what rent to offer the landlords during this period. My thinking ranges from 10% to 25% ( we obviously have different landlords , large and small ( I own one shop so I will be affected also ) ) my main aim is to start successfully trading when we can - thoughts appreciated

Sjp

9:38 AM, 24th March 2020
About 7 months ago

Reply to the comment left by Tim Jones at 24/03/2020 - 09:21
What I’m not understanding is that small businesses have been offered business rates holidays, business grants (non repayable) and stay 80% of wages but you’re assuming landlords don’t have these worries and anxieties. Considering offering 10% gives no consideration to our situation. We’re not all rich money making individuals like most of the rental population think, I am a single parent and live off my income. There’s ZERO help for me. If you’re getting non repayable grants and holidays, why not pay the rent with these? I have to live also

Luke P

10:04 AM, 24th March 2020
About 7 months ago

Surely the £10k grant is to help pay the ongoing bills (rent included), during this time.

Jack Craven

10:47 AM, 24th March 2020
About 7 months ago

This is getting mental, its now good business sense to rent to dss as they have no problem with loss of income !

NEIL T

10:51 AM, 24th March 2020
About 7 months ago

Commercial property question (I have resi too). I'm worried that once word gets around that I'm giving a rent holiday, they'll all be after it. The question is how does one determine who are genuine and who are not?

Tim Jones

11:38 AM, 24th March 2020
About 7 months ago

Reply to the comment left by neilt at 24/03/2020 - 10:51
I think ‘holiday’ is not the best term to use as it’s ambiguous ie is it rent free or just deferred rent !

For residential ( ultimately they are deriving benefit from the property) I think deferment is the best course of action although tenant should pay what they can now

For commercial ( tenants are not deriving any benefit as they are closed ) therefore some shared pain ( my question is how much each side) if grants are available and it works they rent can be paid if the alternative is a soft government loan then for my part do I want to incur increased debt ?not really ! But do landlords want the charity shops to open and thrive and pay rent after all this ? I very much assume so

Sjp

11:40 AM, 24th March 2020
About 7 months ago

Reply to the comment left by Luke P at 24/03/2020 - 10:04
Exactly!

Zara

16:14 PM, 24th March 2020
About 7 months ago

We have received a request from a large plc to pay no rent for the next quarter. Despite the fact they made millions of pounds last year and the government are trying to support them with government grants, no business rates and assisting them to pay staff they have decided that a small landlord can afford to take the hit. Unfortunately we rely on the rent, its our main form of income and the bank are still expecting their interest repayment. I really think the government need to put something in place to ensure small commercial landlords aren't eaten up by the heavy weight companies with their own agenda to protect their own profitability.


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