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UK Hospitality calls for six-month rent break

Trade body UK Hospitality is urging the government to immediately extend the three-month freeze on commercial property rent to six months to protect businesses as landlords threaten companies with bailiff action.

Bars, pubs and clubs in the UK have been closed due to the coronavirus pandemic

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.

Thousands of businesses in the UK were due to pay their quarterly rent last week (25 March). However, the government introduced a suspension on commercial landlord sanctions and debt enforcement for at least three months.

Kate Nicholls, chief executive of UK Hospitality, said the suspension “does not go far enough” and the industry needs a “full rental debt enforcement moratorium”.

UK Hospitality has written to the government to ask for an “immediate extension” of the forfeiture moratorium for six months.

It also called for terms to include wider debt enforcement measures, such as winding up orders ( a court order that forces an insolvent company into compulsory liquidation), statutory demands and commercial rent arrears recovery (CRAR).

UK Hospitality is also urging the government to ask landlords to use the time to renegotiate terms with tenants.

‘Death sentence’

The letter to the Ministry of Housing, Communities and Local Government said the hospitality sector had been hit with threats from landlords including winding up orders and bailiff action.

Nicholls said: “Rather than use this as an opportunity to work with businesses to investigate rent deferrals or waivers, many landlords have instigated, or threatened to instigate, actions that will cripple businesses and lead to a further loss of jobs on a significant scale.

“We have had reports of excessive interest payments applied to rent deferrals, as well as winding up orders and bailiff action being threatened – at a minimum imposing extra cost to business and at worst threatening their ongoing viability.

“We have also been alerted to instances where funds have been withdrawn from deposits with top-ups demanded in order to avoid lease terms being broken.

“This is an unprecedented medical, social and economic crisis for the country, with citizens pulling together. Millions of people’s livelihoods and job security depend on businesses working in harmony.

“Business as usual cannot apply at this stage. Yet, landlords are effectively signing a death sentence for many businesses that are just about keeping afloat.

“We need legal protection to buy time for under-pressure businesses. Otherwise, they will fold, and even more jobs lost.”

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