The government is set to publish a code of practice to support high street landlords during the Covid-19 pandemic, as June’s quarterly rent day looms.
The code, which will initially be temporary, will be designed to provide “clarity and reassurance” over rent payments by fostering “fair and transparent” discussions between landlords and tenants.
It also aims to set out guidance on rent arrear payments and treatment of sub-letters and suppliers.
A working group has been set up by the government with the commercial rental sector, with the aim of publishing the code before the June quarterly rent date.
This group includes:
• British Chambers of Commerce
• British Property Federation
• British Retail Consortium
• Commercial Real Estate Finance Council
• Revo
• Royal Institution of Chartered Surveyors
• UKHospitality
Elsewhere, banking trade body UK Finance has reiterated its “continued support” for commercial landlord customers, including amendments to facilities and capital payment holidays.
Ahead of the June payment day, all main commercial lenders will contact their commercial landlord borrowers to discuss concerns and support.
Chancellor Rishi Sunak said: “The government is committed to supporting the commercial rental sector as it deals with the disruption caused by the coronavirus outbreak.
“We continue to work with lenders to ensure flexible support is provided to commercial landlords, including payment holidays and restructuring facilities, and it is right that where landlords receive support, they extend this to their tenants.”
Communities secretary Robert Jenrick added: “We expect all parties to come to the table so our high streets and town centres are in the best possible position to come back from these challenges.
“We are giving clarity to landlords and tenants who are both facing equal pressures on their finances so they are all able to stabilise their finances and bounce back.”
Melanie Leech, chief executive of the 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.
“Fair collaboration among lenders, property owners and tenants is vital to the UK’s recovery, and it will ensure that viable businesses in distress as a result of coronavirus are supported, to protect both people’s jobs and the local authorities, savers and pensioners who own the majority of our town centres.”
Vivienne King, chief executive of Revo, said the code should be “principles-based”, to avoid cutting across existing contractual agreements and undermining the potential for collaboration.
King said: “We know around a third of rent was collected at the first quarter, and we expect the financial pressure to be even more acute at the second quarter payment date in June.
“The code of conduct is an approach to managing behaviours and must be underpinned by the fundamental principle that those businesses that can pay, should pay. By equal measure, those property owners that can provide support to businesses in distress, should do so.
“We have pressed for the code to be a voluntary framework, providing both parties with the flexibility to create solutions suited to the circumstances. If it is too rigid there is the risk it interferes with the stability of existing contractual agreements, and undermines the collaborative spirit that is emerging as many retailers and property owners try to find new ways of working together.”
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