Gov calls for evidence on Covid commercial rent debts

The government has called for evidence regarding the current state and progress of commercial rent debts in the wake of the Covid-19 pandemic.

Hospitality groups, such as UKHospitality (UKH), have praised the government’s move as an attempt to address issues relating to commercial rent debts for businesses within the sector.

The government’s call for evidence sets out six options to address the crisis, including allowing existing tenant protections to cease and a more targeted level of support to having binding adjudications.

Kate Nicholls, UKH’s chief executive, said: “It is very positive that government has finally appreciated the need to consider additional measures in the commercial lease market. After a year of lockdown and restrictions rent debt in the hospitality sector has topped £2 billion and businesses still face months without being able to trade profitably.

“This level of debt simply cannot be paid off in the short-term. There must be sustained and targeted support to allow tenants and landlords to reach agreement. This must include measures from landlords to write off a level of Covid-related debt.”

She added: “It is encouraging that government has recognised that uncertainty over reopening dates has made it almost impossible to find agreement, and even after reopening it will take time for businesses in sectors like hospitality to return to pre-pandemic trading levels.

“As government has recognised it will take longer for our sector to adjust and that is why ongoing protection is needed. All businesses will hope to reach an amicable agreement with their landlords but as the document highlights the risk of failure to do so is further economic harm, leading to higher unemployment.”

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