Despite the new three-month moratorium to block commercial evictions, further protection is urgently required for hospitality tenants, says Jonathan Downey, co-founder of London Union.
Speaking to The Caterer on Wednesday, Downey said: “The forfeiture moratorium will prevent landlords from changing locks and repossessing premises but it doesn’t stop other kinds of debt enforcement action.”
Working closely with UKHospitality’s chief executive Kate Nicholls, Downey has drafted a six-point action plan for operators to work towards, of which number four is “to create a six-month debt enforcement moratorium to give landlords and businesses breathing space against litigation, foreclosure and other enforcement of security”.
Calling for a ceasefire between landlords and tenants, Downey told The Caterer: “It’s a bit like a ceasefire for an airborne conflict but there are still ground troops fighting. We need to stop all the fighting because this is affecting everyone. Landlords need that protection too.”
While it is anticipated that the majority of operators will not experience any backlash from landlords for temporarily withholding rent, Downey’s continued pressure on the government comes after reports of landlords employing aggressive tactics to bully people into paying rent: “I’d be amazed if any of them carry it through but some of them will do.”
He praised the government for “working wonders in the time available” and delivering “some extraordinary measures” in pushing through the forfeiture moratorium from concept to law within 13 days, but said a new moratorium preventing landlords from pursuing tenants in the courts was needed “within days”.
The moratorium of forfeiture legislation announced on 23 March was welcomed by industry bodies including UKHospitality and operators impacted by the coronavirus crisis. Under normal circumstances, landlords would be able to seize a property 28 days after a missed rent payment. But as Downey stressed: “It’s a moratorium on forfeiture. It doesn’t mean that you don’t owe that rent and that debt is still not due.”
If a new moratorium was enacted, no landlord will be able to take any action in relation to anybody regarding the recovery of any amount due under any lease. “This is a complete freeze on any action to recover any debt by anybody at any time, ideally within a six-month period,” Downey said, stressing that the freeze would offer both operators and landlords protection against their banks and other lenders who may be seeking to enforce debt security and trying to take possession of premises.
“So unless your specific situation is so precarious and your site is so valuable and at such risk that you daren’t not pay your rent, my advice to everyone is – do not pay your rent, do not pay your service charge, do not pay any amount due under your lease. Just wait a day or two, if it’s safe for you to do so, and you’ll have to make your own decision about that, and then we’ll have some further protection,” Downey said in a statement to hospitality owners.
“Everyone is under pressure and none of us have any time,” he said. Downey took to Twitter on Wednesday afternoon urging operators: “DO NOT PAY YOUR RENT. Your business and the people you employ are more important. The Government is behind this.”
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