Bars gain further protection from landlords

24th April, 2020 by Nicola Carruthers

Trade body UK Hospitality has welcomed the government’s new measures to prevent landlords from using aggressive methods to collect rent from businesses, which will provide “extra protection” for the industry.

Spirits Bottles

The new measures will “curb the aggressive behaviour” of landlords

The new rules, announced yesterday (23 April), will temporarily ban the use of statutory demands and winding up orders to claim unpaid rent due to the pandemic.

The UK government will also establish secondary laws 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.

The new legislation to protect tenants will be in force until 30 June, and can be extended in line with the moratorium on commercial lease forfeiture.

On 24 March, the UK government introduced emergency legislation to prevent landlords from repossessing commercial properties if businesses were unable to pay their rent during the covid-19 pandemic.

UK Hospitality chief executive Kate Nicholls said the move was a “very helpful and pragmatic response” and will provide hospitality businesses with “some very valuable breathing room”.

She said the organisation has “pushed the government to provide extra protection for businesses, so it is good to see positive action”.

Nicholls continued: “Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for a significant number.

“This is likely to be the case for the rest of the year and further government action is required to address this for the next nine months.

“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 must be extended to ensure that businesses can survive. A cancellation of existing sanctions is also very welcome.

“The majority of landlords have understood the challenges the sector has faced, but these measures were much needed to curb the aggressive behaviour of others which, if left unchecked, threaten hundreds of thousands of jobs.”

Support in Wales

In a separate announcement yesterday (23 April), UK Hospitality is also urging the Welsh government to “ring-fence” funds for the sector.

UK Hospitality executive director for Wales David Chapman welcomed the government’s addition of £100 million (US$123m) to the Economic Resilience Fund in Wales this week (20 April), which will “provide a much-needed lifeline for businesses seriously hit by this crisis”.

He said: “We hope that, as we begin to look at renewal, the Welsh government goes even further and makes sure that sufficient cash is ring-fenced for hospitality. Our sector’s future is really precarious – we have been hit very hard by the crisis, probably more than any other industry in Wales, and it will take, in some cases, considerable time – maybe 12 months for our businesses to even start to properly recover.

“We can help government target sufficient ring-fenced funds for our industry and it would underline just how critical our new foundation sector is for the Welsh economy and reflect its importance in the eyes of the Welsh government.”

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