In order to solve the commercial property rent debt crisis caused by covid-19 closures, UKHospitality have proposed a seven-point plan.
So far, the government has aimed to protect as many businesses as possible from eviction through the lease forfeiture and debt enforcement moratoria, that ends on 31 December. However, according to UKHospitality there is still an estimated £1.6 billion of unsettled rent payments from within the lockdown periods.
As well as this, the trade body has stated that this will only increase throughout December, with the quarterly payment date in sight and because landlords have made it clear they will use the end of the moratoria to distribute winding up-petitions and evictions notices to their tenants. As a result, UKhospitality is using their seven-point plan to encourage urgent government action to protect the industry from yet another wave of job losses and business closures.
UKHospitality’s chief executive, Kate Nicholls, has said: “The rent crisis, with the December quarterly rent day and the end of the moratoria fast approaching, is the biggest threat to the recovery and future of hospitality. There can be no more excuses about parliamentary time or available finance; this needs to be resolved, otherwise the support government has provided to the sector so far this year will all be in vain.”
Overall, UKHospitality’s plan proposes:
- Extending the debt enforcement moratoria to June 2021 in order to give businesses a period to find a sustainable solution to managing covid-19 related rent debt.
- Set an advisory level for rent forgiveness of at least 50% of rent debt for periods when businesses were forced to close. This could be supported by tax reliefs for landlords. In return, tenants would then have to make a rent debt payment of at least 25%.
- The introduction of a ten-year low-cost government-backed property bond for tenants who wish to meet minimum payment thresholds but are unable to.
- A reset rent review.
- A break clause with a 50% reduction rent debt.
- And finally, to start discussions for a long-term commercial property letting review.
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