The government has announced an extension of the ban on commercial evictions for three months to 30 June.
The government's position has been to leave commercial landlords and tenants to agree their own arrangements for paying or writing off rent debts, and a code of conduct setting out best practice for these negotiations was published last year. However, the code did not give firm guidelines or additional protections for tenants, and it has been described as ‘toothless' and a ‘waste of time'.
But now the government has said that if these discussions do not happen, and there remains a significant risk to jobs, it is prepared to take further steps. It is launching a call for evidence on commercial rents to help monitor the progress of negotiations between tenants and landlords.
The call for evidence will also set out potential steps the government could take after 30 June, ranging from a phased withdrawal of current protections to legislation targeted at those businesses most affected by Covid-19.
Michael Kill, chief executive of the Night-Time Industries Association (NTIA), said rent debt that continues to pile up for business owners will inevitably compromise their future and the issue needed government intervention.
He said: "[This] will require lead departments to use this period to address these issues and look at potential solutions where the stakeholders share the burden of debt from rent arrears. Consideration needs to be given to a more robust code of conduct, which would require some mandatory elements within it, similar to the Australian model, ensuring that each stakeholder comes to the table to resolve this current situation."
UKHospitality chief executive Kate Nicholls said: "Extending the moratorium is a sensible and positive step by the government. It was really the only option for businesses that are on the brink of reopening but have piled up so much rent debt over the past year.
"It is even more encouraging to see the government issuing a call for evidence on the possibility of additional measures to solve the rent crisis. Rent debt has spiralled to unmanageable levels for too many businesses through no fault of their own. We have reached an impasse that threatens the survival of many businesses right at the moment that they are looking to reopen and rebuild.
"The government's suggestion of a phased approach and targeted legislation could provide the flexibility combined with incentive our businesses need. We hope that this motivates landlords to come to the table with meaningful concessions. Refusal to do so would force the government to go down the legislative route, which would cause greater delays and trigger further business closures, even upon reopening, due to unsustainable levels of debt with no end in sight.
"UKHospitality has been long calling for a government-brokered solution to the problem. We must find a mutually agreeable solution that works for all parties involved – tenants, landlords and investors. Tenants have borne the brunt of the pain of closure so far and it is clear that others need to take their share, too. It is integral to the future of the UK's hospitality sector and high streets across the country, which we hope will drive the economic recovery of the country. We hope the government investigates this avenue of approach. It must also now extend the insolvency moratorium to provide full protection."