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Thu 23rd Apr 2020 - Government to protect businesses from aggressive rent collection
Government to protect businesses from aggressive rent collection: The government has announced high street shops and other companies, including those in the hospitality sector, that are “under strain” will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic. The government said the majority of landlords and tenants are working well together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics. To stop these unfair practices, the government will temporarily ban the use of statutory demands and winding up orders where a company cannot pay their bills due to coronavirus, to ensure they do not fall into deeper financial strain. The measures will be included in the Corporate Insolvency and Governance Bill, which business secretary Alok Sharma set out earlier this month. The government said it was also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent. It said: “This will further safeguard the high street and millions of jobs by helping to protect them from permanent closure during this time. However, while landlords are urged to give their tenants the breathing space needed, the government calls on tenants to pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too.” Sharma said: “In this exceptional time for the UK, it is vital we ensure businesses are kept afloat so they can continue to provide the jobs our economy needs beyond the coronavirus pandemic. Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme. I know 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 coronavirus emergency continues. The temporary emergency measures are designed to acknowledge the pressures landlords are facing while encouraging co-operation in the spirit of fair commercial practice. They also come on top of a substantial package of business support measures, including a moratorium on evictions for commercial tenants for at least a three-month period.” UKHospitality chief executive Kate Nicholls said: “This is a very helpful and pragmatic response from the secretary of state and will give hospitality businesses some very valuable breathing room. Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for some. This extra space will allow businesses to survive and to find a way to work with landlords. If social distancing measures are to be in place for some time, as we now believe they will, this measure may need to be extended to ensure that businesses can survive.”


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