Government steps in to prevent businesses being evicted

By Stefan Chomka

- Last updated on GMT

Government steps in to prevent restaurant businesses being evicted rent lease moratorium

Related tags coronavirus Coronavirus

The Government is to introduce a much-needed lease forfeiture moratorium that will prevent landlords from repossessing commercial premises if businesses are unable to pay their rent.

The move will come as a huge relief for businesses that were facing rent bills, due to be paid on Wednesday (25 March), many of which will have been unable to do because of a massive drop in turnover as a result of the Coronavirus and restaurants and pubs having been forced to close by the Government.

While some landlords had reached agreements with their tenants over rental holidays or a switch to monthly payments, including pub group Young’s, which introduced a ‘property’ rent holiday for a period of three months, starting this week, BigHospitality​ understands that many landlords were still demanding full rent payable on 25 March.

Pressure had been increasing on the Government​ to make such as move, with many of its previous concessions becoming redundant if businesses ended up being locked out of their premises this week.

The forfeiture moratorium will last for a minimum of three months, but there is the chance it could be extended in the future. It is not a rental holiday, however, and the Government says that landlords are still owed rent and, should this not be paid once this clause of the legislation has elapsed, will be able to claim for forfeiture.

The moratorium will also only apply to the collection of rent, so wont cover things such as insurance and other landlord-charged costs.

London Union’s Jonathan Downey who, alongside UKHospitality, has been calling for a lease forfeiture moratorium, responded to the news by describing it as “brilliant, brilliant, brilliant”. “Business owners will now have some proper time to work out how best to push through this and bounce out the other side,” he said.

Taking to Twitter, UKHospitality CEO Kate Nicholls, who has been lobbying tirelessly Government to give the hospitality sector the support it needs, welcomed the decision, saying it “eases the pressure cooker of quarter rent day and allows us to focus all available cash on supporting our teams”.

In a statement she added: “With the next pending rent day falling this Wednesday, this move by the Government is hugely welcome and will help to protect jobs across the sector. The industry has been pressing ministers for several days to act on this crucial issue, and we are thankful they have responded positively to our concerns."

“While this removes the immediate cashflow pressure of quarter rent day, the Government has made clear that the negotiation is now with lessee and landlord to reach a solution on payment. Hospitality businesses want to work with landlords constructively during this crisis to find solutions and the hope now is that they enter into meaningful discussions on the optimum way forward.”

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