Secure Income REIT’s Nick Leslau has written to business secretary Alok Sharma warning of the “unintended consequences” the Coronavirus Act is having on landlords and urged the government to allow landlords to protect themselves against tenants not paying rent.
The government has temporarily banned landlords from using statutory demands or winding-up petitions. But Leslau wrote to the business secretary to claim that this, alongside other government interventions, has meant that “tenants can simply refuse to meet their rent obligations” out of “an act of commercial choice rather than crisis-induced necessity”.
Leslau urged the government to reconsider its approach to ensure that landlords can “protect their interests and those of their stakeholders against the abuse of tenants’ protections in cases where tenants can afford to pay yet choose not to”.
He said that a code of conduct between owners and tenants needs to be mandatory otherwise it will “be abused by unscrupulous companies gaming the system”.
He called for reforms to the CVA process to prevent it from being used as a “vehicle to strip commercial property owners of their reserves and UK shareholders, pensioners and savers of their returns”.
Secure Income REIT is currently embroiled in a bitter spat with Travelodge, who has asked its landlords to waive up to £146m in rent as part of its recovery plan.
If landlords do not agree, Travelodge has threatened to start a CVA process.
Rent from Travelodge amounts to 6.4% of Secure Income REIT’s annual rental income, according to the company.
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