New code of practice on rent payments in the works

The government has formed a working group to prepare a code of practice that will provide high street businesses and landlords with clarity and reassurance over rent payments during the coronavirus pandemic.

The working group, with leading businesses and trade associations as members, will also prepare a guidance on rent arrear payments and treatment of sub-letter and suppliers.

“We are giving clarity to landlords and tenants who are both facing equal pressures on their finances so they are all able to stabilise their finances and bounce back,” said Communities Secretary Robert Jenrick.

Chancellor Rishi Sunak added that the government continues to work with lenders to provide flexible support commercial landlords in the form of payment holidays and restructuring facilities.

“It is right that where landlords receive support, they extend this to their tenants,” he said.

Helen Dickinson, chief executive of the British Retail Consortium, which is part of the working group, termed the initiative as a “positive first step.”

“We 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 commented.

The government said the code will be temporary in nature, but added that it will explore options to make it mandatory if necessary.

“We 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,” Ministry of Housing, Communities and Local Government said in a statement.

Government moves to prevent aggressive rent collection and closure

Earlier, the government has taken measures to prevent any business being forced out of their premises if they miss a payment until 30 June, with an option to extend this if needed. It has temporarily banned the use of statutory demands and winding up orders where a company cannot pay their bills due to coronavirus.

The government has also brought in secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery unless they are owed 90 days of unpaid rent.

Members of the working group include: