Commercial landlords must be prevented from taking punitive legal actions against businesses suffering a loss of income during the coronavirus crisis, UKHospitality has told the government.
In a letter to the Ministry of Housing, Communities and Local Government, the trade body called for an immediate extension of the forfeiture moratorium to six months and a widening of its scope to prevent broader debt enforcement measures, including winding-up orders, statutory demands and commercial rent arrears recovery.
UKHospitality chief executive Kate Nicholls said: "We urgently need action from the government to provide legal protection for businesses. The moratorium on evictions of commercial tenants announced last week does not go far enough, we need a full rental debt enforcement moratorium.
"Rather than use this as an opportunity to work with businesses to investigate rent deferrals or waivers, many landlords have instigated, or threatened to instigate, actions that will cripple businesses and lead to a further loss of jobs on a significant scale. We have had reports of excessive interest payments applied to rent deferrals, as well as winding-up orders and bailiff action being threatened – at a minimum imposing extra cost to business and at worst threatening their ongoing viability. We have also been alerted to instances where funds have been withdrawn from deposits with top-ups demanded in order to avoid lease terms being broken.
"This is an unprecedented medical, social and economic crisis for the country, with citizens pulling together. Millions of people's livelihoods and job security depend on businesses working in harmony. Business as usual cannot apply at this stage. Yet, landlords are effectively signing a death sentence for many businesses that are just about keeping afloat.
"We need legal protection to buy time for under-pressure businesses. Otherwise, they will fold, and even more jobs will be lost."
Following country-wide closures in the industry, operators with little or zero operating income have faced no choice but to withhold rent. But negotiating with landlords is proving a minefield for the majority of tenants who have minimal experience navigating through this unknown territory. Many spoke to The Caterer about their experiences earlier this week.