The government put a temporary ban on commercial tenant eviction for non-payment of rent

The government put a temporary ban on commercial tenant eviction for non-payment of rent

Commercial tenants are being threatened with legal action for non-payment of rent during the coronavirus crisis, despite government protection.

Last month, Section 82 of the Coronavirus Act 2020 was introduced to ban the forfeit of commercial leases until 30 June 2020 – or longer if the government deems it necessary – for not paying rent.

However, this doesn’t stop landlords from issuing statutory demand notices and winding up orders, making debt claims or pursuing Commercial Rent Arrears Recovery (CRAR). These threats are serious – winding up orders and statutory demand notices can push businesses into insolvency within days.

Larger brands that have been affected include Caffe Concerto, Pho, David Lloyd Clubs and PureGym.

Mixed reactions

Some small business owners are having to turn to unsympathetic landlords.

Janine Tozer, founder of Not Just Pets, has branches in Bath and Frome. She has two separate landlords and, at the time that the lockdown started, approached both about either deferring rent payments or paying them by half for three months. Neither of the landlords were happy with the proposals, saying that she’s still trading and should be relying on emergency government funding.

“We were doing deliveries, but we were taking less than half of our normal income. We’ve furloughed four members of staff and are under extreme pressure,” she told SmallBusiness.co.uk

Tozer is on a forum for local traders in Frome. Her fellow entrepreneurs have had a real mix of reactions from their landlords: “Some have contacted the tenants offering to help, others have offered no help at all and others half-help like ours,” she said.

In response to these findings, Andrew Goodacre, Bira’s CEO, said: “I am disappointed by the reaction of some landlords to the current retail crisis. Some landlords have tried to help whereas others have simply ignored the fact that a retailer has had their store closed by government actions and are still waiting for cash to come into the business.

“My advice to retailers is to talk to the landlord, discuss payment plans and try to find a way forward. The government has introduced a three-month moratorium for non-payment of rent and this time should be used to productively find a way forward to benefit both parties.”

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