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Commercial landlords banned from using 'aggressive debt recovery tactics'

23 April 2020 by
Commercial landlords banned from using 'aggressive debt recovery tactics'

Commercial landlords will be banned from using "aggressive debt recovery tactics" as companies try to navigate the coronavirus crisis.

The government is to introduce a temporary ban on the use of statutory demands and winding up orders where a company cannot pay its bills due to coronavirus, to ensure they do not fall into deeper financial strain, business secretary Alok Sharma has said.

Landlords will also be banned from using commercial rent arrears recovery, unless they are owed 90 days of unpaid rent.

Sharma, said: "In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic.

"Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme.

"I know that like all businesses they are under pressure, but I would urge them to show forbearance to their tenants. I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the Covid-19 emergency continues.

"The temporary emergency measures are designed to acknowledge the pressures landlords are facing while encouraging co-operation in the spirit of fair commercial practice. They also come on top of a substantial package of business support measures, including a moratorium on evictions for commercial tenants for at least a three-month period."

Chief executive of UKHospitality, Kate Nicholls, added: "This is a very helpful and pragmatic response from the Secretary of State and will give hospitality businesses some very valuable breathing room.

"Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for some. This extra space will allow businesses to survive and to find a way to work with landlords. If social distancing measures are to be in place for some time, as we now believe they will, this measure may need to be extended to ensure that businesses can survive."

Photo credit: Shutterstock

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