Tenants back to facing eviction for non-payment of rent as shops reopen #SmallBiz - The Entrepreneurial Way with A.I.


Thursday, June 11, 2020

Tenants back to facing eviction for non-payment of rent as shops reopen #SmallBiz

Originally written by Timothy Adler on Small Business

The Government appears unlikely to extend tenant protection from commercial landlords who want to evict them for non-payment of rent because of Covid-19.

The business department had given shops, pubs and restaurants three months of protection from eviction for non-payment of rent during the coronavirus lockdown.

But a draft code of practice seen by the Financial Times on how landlords should treat commercial tenants as small businesses emerge from lockdown makes no mention of extending the eviction grace period.

>See also: 4 ways small shops can reinvent themselves post coronavirus

Many businesses had assumed the current eviction suspension would be extended past June 24, the next rent quarter day.

If so, many businesses could find themselves forced out of commercial premises for non-payment of rent due to Covid-19.

Instead, the code, which is voluntary, states:

  • Tenants should pay rent if they can, even if only partially
  • Landlords who are in a position to show clemency should do so
  • Tenants should prioritise paying service charges before rents

James Daunt, chief executive of bookshop chain Waterstones, told the FT that what is needed is statutory protection for tenants from aggressive landlords.

Daunt said: “As soon as current protections expire, I think there will be some pretty serious consequences for smaller retailers in particular.”

The Government hopes to publish the voluntary code of practice before the end of this week.

>See also: How to reopen your restaurant, pub or hotel post-lockdown

The draft code hopes that landlords and tenants will “share the property-related costs and business risks of the Covid-19 crisis in a proportionate and measured way” but stops short of anything mandatory.

Landlords would argue that small businesses have availed themselves of grants and year-long interest-free loans and should use that to pay rent.

Tenants say that they have been unable to trade for the past three months, still have to pay suppliers, and why should they alone shoulder the pain and not landlords?

On the other hand, landlords will not want to be lumbered with empty units if, as many predict, commercial rental values crash as the economy emerges post lockdown.

Further reading

How to reopen your small business post lockdown – what we know so far

Tenants back to facing eviction for non-payment of rent as shops reopen

via https://ift.tt/2Jn9P8X by Timothy Adler, Khareem Sudlow