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Government Support for High Street Businesses facing Eviction

As of the 19th June 2020, the UK government has issued a statement that blocks commercial landlords from evicting small businesses and other shops until at least September 30th.

Previously, the draft voluntary code of practice did not mention an extension on the original three-month suspension on landlords repossessing premises and evicting tenants as a result of non-payment of rent due to the Coronavirus Pandemic, however, the government has performed a U-Turn on this.

What does this mean for your business?

This U-Turn means that the Government will amend the Coronavirus Act and extend the suspensions on evictions. This means that if your business faces difficulty, you will not be forced out of your premises if you miss a payment in the next three months.

Secondary legislation is also in place that prevents landlords from using Commercial Rent Arrears Recovery.

What to watch out for?

Be careful as this secondary legislation prevention will only be enforced if landlords are owed less than 189 days of unpaid rent.

The Draft Code of Practice also does stress that tenants should pay their rent in full or pay what they can. Landlords also should make every effort to support you and your business.

Robert Jenrick “We are extending measures to protect those who are unable to pay rent from eviction so that businesses have the security they need to plan for their futures.” Robert Jenrick, Communities Secretary

Therefore your business is likely to have a greater cash flow in the short term, which can be used to prepare for the future, when this extension is inevitably stopped.

Longer term benefit for Landlords

Although landlords will see a drastic fall in rent in the short term, the financial outlook for them in the long term is positive if their tenant remains in business post this pandemic.

By allowing tenant's short term flex over rent payment, will be a cash-flow lifeline allowing businesses to rebuild. Landlords will then see their rental income return to normal for the long term!

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