Coronavirus temporary store closure

Mobility retailers operating on the high street that are under strain will be protected from aggressive rent collection and will instead be asked to pay what they can during the pandemic under new plans set out by Business Secretary Alok Sharma.

The new measures are designed to protect companies that have seen revenues dramatically decline as lockdown keeps shoppers away from physical bricks and mortar stores.

According to the government, landlords and tenants are working together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics.

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To stop these unfair practices, the government will temporarily ban the use of statutory demands (made between 1 March 2020 and 30 June 2020) and winding up petitions presented from Monday 27 April, through to 30 June, where a company cannot pay its bills due to coronavirus.

The steps will aim to help ensure struggling companies do not fall into deeper financial strain.

The measures will be included in the Corporate Insolvency and Governance Bill, which the Business Secretary Alok Sharma set out earlier this month.

In addition, the government is also laying secondary legislation 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.

“In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic,” commented Alok Sharma.

“Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme.

“I know that like all businesses they are under pressure, but I would urge them to show forbearance to their tenants. I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the COVID-19 emergency continues.”

Whilst the new measures aim to give their tenants the breathing space needed, the government has also called on tenants to pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “Rents are a huge burden for retailers that must be paid even where shops are closed. We have raised this problem with government and today’s announcement protects firms who – during these extraordinary times – are unable to meet their rent obligations.”

The announcement continues the government support aimed at the retail sector and high street providers in particular who have been among some of the hardest-hit businesses during the outbreak.

Recently, the government released a new ‘support finder’ tool to help businesses quickly determine what financial support they may be eligible for.

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