Hospitality body welcomes new laws and code of conduct to help protect from eviction

25/11/2021

Trade body leaders in the hospitality, leisure and commercial sectors have welcomed the news that many high street businesses, forced to close during the pandemic will be further protected from eviction.

Hospitality premises like restaurants and pubs have been hardest hit by the pandemic and will welcome the extra support.

The Government has announced new laws and a Code of Practice to deal with rent arrears in the commercial property sector which affects businesses such as restaurants,  pubs, gyms, accommodation and retail premises that had to close their doors because of Government restrictions.

Under the new temporary measures, landlords will not be able to chase business tenants for rents through the courts, in a move aimed at encouraging firms to negotiate the estimated £7 billion of debts accrued during the pandemic.

From 25 March 2022, new laws introduced in the Commercial Rent (Coronavirus) Bill, introduced in Parliament, will establish a legally-binding arbitration process for commercial landlords and tenants who have not already reached an agreement, following the principles in the Code of Practice.

The Government announced a ban on business evictions at the start of the pandemic, which remains in force until March 2022.

Important to share the burden of lockdown impact

Kate Nicholls, chief executive of trade body UKHospitality, said: “We welcome the publication of the updated Code of Practice.

“Vitally important is the emphasis on ongoing negotiation, to share the burden of the impact of lockdowns and restrictions that prevented hospitality businesses from trading for so much of the last 18 months.

“It is in the long-term interests of landlords and tenants to come together and find solutions that ensure business survival and that do not undermine the economic recovery.

“We share Government’s view that arbitration should be a last resort and this. It must not impact this industry’s ability to rapidly recover and create jobs throughout the country.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “We will engage closely and constructively with Government to help ensure their proposals protect otherwise viable businesses, secure the recovery, and protect jobs.”

Clear process for settling outstanding debts

The measures, announced by Business Secretary Kwasi Kwarteng, says negotiations on arrears will be underpinned by the new Code of Practice, providing landlords and tenants with a clear process for settling outstanding debts before the new arbitration process comes into force.

The Code says tenants unable to pay in full should negotiate with their landlord in the expectation that the landlord waives some or all rent arrears where they can do so.

The Government says commercial tenants will be protected from debt claims, including County Court Judgements (CCJs), High Court Judgements (HCJs) and bankruptcy petitions issued against them concerning arrears from when they had to close for lockdowns.

The measures will apply to commercial rent debts related to certain businesses such as pubs, gyms and restaurants which were forced to close during the pandemic.

Debts accrued at other times will not be in the scope of the new laws, which will come into force in England and Wales, and Northern Ireland will have a power in the Bill to introduce similar legislation.

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