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Wed 10th Mar 2021 - Government launches call for evidence over rent debt situation as it extends moratorium by three months
Government launches call for evidence over rent debt situation as it extends moratorium by three months: The government has launched a call for evidence on potential interventions to the rent debt situation as it extended a ban on evictions of commercial property tenants until the end of June. The moratorium, which was introduced in March last year and has been extended three times already, prevents property owners from pursuing tenants for unpaid rent by legal means, or from evicting them. The latest extension had been due to expire at the end of this month. The government said the majority of commercial landlords have shown “flexibility, understanding and commitment to protect businesses during an exceptionally challenging time”. But it has launched a call for evidence as it looks to solve the issue of rent liabilities, which has seen the sector build up a debt pile of about £8bn over the past 14 months with businesses forced to close or trade with heavy restrictions. Communities secretary Robert Jenrick said: “It is right that as we move through the roadmap, we ensure that businesses and renters continue to be supported. We have taken unprecedented action to support both commercial and residential tenants throughout the pandemic – with a £280bn economic package to keep businesses running and people in jobs and able to meet their outgoings, such as rent. These measures build on the government’s action to provide financial support as restrictions are lifted over the coming months – extending the furlough scheme, business rates holiday and the Universal Credit uplift. Business secretary Kwasi Kwarteng added: “The government’s current position is to support commercial landlords and tenants to agree their own arrangements for paying or writing off rent debts by 30 June. This is supported by the code of conduct published by the government last year, setting out best practice for these negotiations. But, if these discussions do not happen and there remains a significant risk to jobs, the government is also prepared to take further steps. We are, therefore, launching a call for evidence on commercial rents to help monitor the overall progress of negotiations between tenants and landlords. The call for evidence will also set out potential steps that government could take after 30 June, ranging from a phased withdrawal of current protections to legislative options targeted at those businesses most impacted by covid-19. We would welcome a broad range of feedback to this call for evidence.” UKHospitality chief executive Kate Nicholls said: “Extending the moratorium is a sensible and positive step by the government. It was really the only option for businesses that are on the brink of reopening but have piled up so much rent debt over the past year. It is even more encouraging to see the government issuing a call for evidence on the possibility of additional measures to solve the rent crisis. Rent debt has spiralled to unmanageable levels for too many businesses through no fault of their own. We have reached an impasse that threatens the survival of many businesses right at the moment they are looking to reopen and rebuild. UKHospitality has been long calling for a government-brokered solution to the problem. We must find a mutually agreeable solution that works for all parties involved – tenants, landlords and investors. Tenants have borne the brunt of the pain of closure so far and it is clear that others need to take their share, too. It is integral to the future of the UK’s hospitality sector and high streets across the country, which we hope will drive the economic recovery of the country. A compromise must be reached in order to allow the recovery of hospitality businesses and the government must be at the heart of talks to find that compromise.”

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