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16th June 2020

Code of Practice for high street business tenants and landlords

The government have revealed that they will be publishing a code of practice for business tenants and landlords to help with discussions relating to rent. It is hoped to be published before 24 June 2020.
The government intends that the code will:

  1. encourage fair and transparent discussions between parties over rental payments during the pandemic; and
  2. provide guidance on rent arrear payments and the treatment of those that are sub-letting.
The aim is to enable collaboration and cooperation within the sector to encourage tenants, landlords, lenders and suppliers to work together.

Melanie Leech, Chief Executive, British Property Federation said. “The majority of property owners and tenants are already working well together, effectively engaging and agreeing sustainable plans, and we welcome the opportunity to work with government and others to codify this good practice.”

The guidance may become mandatory if necessary. The government revealed that a working group is working on producing the guidance and has stated that it will engage with the Devolved Administrations to ensure the code applies across the United Kingdom.

The government’s package of measures for the commercial sector also involves:

  • preventing any business being forced out of their premises if they miss a payment until 30 June. The government has an option to extend this if needed.
  • temporarily banning the use of statutory demands (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. This is included in the government’s Corporate Insolvency and Governance Bill.
  • generating 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.
It is clear the government are aware they need to do much more if they are to give the high street a fighting chance of surviving.

Given the government’s aim to produce the code before the next quarter we anticipate some news imminently. We will update you when we hear more. In the meantime please do not hesitate to contact our Real Estate team for any advice or assistance with structuring any temporary landlord and tenant arrangements.
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