High street businesses to benefit from a new code of practice
High street businesses and landlords are set to benefit from a new code of practice, to provide them with clarity and reassurance over rent payments.
The government has established a working group with the commercial rental sector to develop a code that encourages fair and transparent discussions between landlords and tenants over rental payments during the coronavirus pandemic and provides guidance on rent arrear payments and treatment of sub-letters and suppliers.
This is expected to enable collaboration and co-operation within the sector and help ensure no one part of the chain shoulders the full burden of payment.
"We are developing a new code of practice, working alongside the industry’s leading bodies, to provide that clarity and reassurance to both commercial tenants and their landlords in recognition of the challenges they are facing as a result of coronavirus," said Communities Secretary Robert Jenrick.
"We expect all parties to come to the table so our high streets and town centres are in the best possible position to come back from these challenges."
The group is said to also involve wider business input through its sector members to ensure a greater number are consulted and able to share their views.
The Chancellor of the Exchequer, Rishi Sunak, noted that the government is committed to supporting the commercial rental sector as it deals with the disruption caused by the coronavirus outbreak.
"We continue to work with lenders to ensure flexible support is provided to commercial landlords, including payment holidays and restructuring facilities, and it is right that where landlords receive support, they extend this to their tenants," Mr Sunak said.
The code will be temporary in nature, but the government has confirmed it will explore options to make it mandatory if necessary. It also noted it will engage with devolved administrations to ensure the code applies across the UK, and are working to publish it prior to the next quarterly rent payment date.
The government further added that ahead of the June payment day, all the main commercial lenders will be in contact with their major commercial landlord borrowers to identify concerns they have and provide support where appropriate.
Commenting on the news, Helen Dickinson, chief executive of the British Retail Consortium, said that rent demands are increasingly out of kilter with current property values and many retailers are being forced to pay rent on closed stores.
"We welcome the government’s code as a positive first step and are working constructively with it and landlords to ensure that otherwise viable businesses are not forced into administration. However, all sides must be prepared to do more if necessary, given that the commercial lettings market is in need of wider reform," she cautioned.