Government to develop code of practice for landlord and commercial tenant negotiations

29 May 2020 by
closed sign restaurant

The government is to develop a code of practice for high street businesses and landlords to "provide clarity and reassurance over rent payments".

The code will aim to enable collaboration and co-operation, while preventing any one part of a chain from shouldering the full burden of payment, the government has said.

The temporary code, the scope of which has yet to be determined, could be made mandatory, with devolved administrations bought on board to ensure it is applied across the UK.

Communities secretary Robert Jenrick said: "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."

Chancellor Rishi Sunak added: "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."

Responding to the news Kate Nicholls, chief executive of UKHospitality, said: "A code of conduct is a significant step in unlocking the current impasse in the commercial property market. Now is the time for all stakeholders to come to the table and broker an agreement.

"Hospitality businesses have seen revenues all but dry up since March, so government intervention is desperately needed – with a sustainable financial plan in place.

"Our sector needs enforceable measures in place, so that the burden currently borne by operators is shared more equitably. This code could be pivotal in protecting communities and high streets from mass closures and job losses."

Ahead of the June quarterly rent payment day, all main commercial lenders will be in contact with their major commercial landlord borrowers to identify concerns they have and provide support where appropriate, the government added.

Photo: Shutterstock

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