The largest lobby groups representing landlords and retailers have clashed over the details of rent payment holidays to help alleviate the pressure created by the coronavirus pandemic.
The British Property Federation (BPF) and the British Retail Consortium (BRC) launched a joint campaign to urge the Government to cover up to 50 per cent of commercial property rental payments to assist both landlords and high street tenants as they look to survive the challenges brought by the pandemic.
The plans were designed to help pay an estimated £3 billion in rent owed to landlords in the six months to September, with the Government introducing a code of practice to provide clarity to the commercial property sector over rental payments.
The code is voluntary and applies to all commercial leases held by businesses in any sector that has been impacted by the coronavirus pandemic.
The code of practice aims to encourage tenants to pay their rent in full if they able to, and also advises those who can’t pay what they can. The guidance also states that landlords should provide support to businesses if they are in a position to do so.
However, commercial landlords had received just 14 per cent of the rent they were owed at the June quarterly rental deadline, putting them in a difficult position.
Both retail and commercial property bodies now fear that the Government will reject calls for help to cover rent arrears, with the BRC now calling for an extension to the ban on legal action being taken against commercial tenants.
This has brought issues for commercial landlords into sharp focus, with many businesses currently experiencing difficulties because of the coronavirus pandemic, and the Government is now facing more calls to ensure the future of the commercial property sector.
BJ Chong, a Partner advising clients with large Commercial Property portfolios, said: “The last few months have seen many landlords and tenants changing and re-gearing their lease agreements for the preservation of their current and future business relationships and the coming months will inevitably see more of that.
“The September quarter day for payment of rent will soon be here and at the time of writing, the moratorium on forfeiture will expire on 30 September 2020. This may yet be extended.
This time has been one of the most challenging for both Landlords and Tenants. It is important for both parties to seek expert legal advice right at the start of any renegotiation process to ensure that their best interests are protected.”
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