The Business Secretary, Alok Sharma, has set out measures that will help to protect High Street shops and companies under strain from aggressive rent collection during the coronavirus pandemic

The majority of landlords and tenants are working together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics.

To stop these unfair practices, the government will temporarily ban the use of statutory demands and winding up orders where a company cannot pay their bills due to coronavirus, to ensure they do not fall into deeper financial strain.

The measures will be included in the Corporate Insolvency and Governance Bill, announced earlier this month.

Government is also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.

However, while landlords are urged to give their tenants the breathing space needed, the government is calling on tenants to pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too.

Business Secretary, Alok 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 cooperation in the spirit of fair commercial practice.

They come on top of the moratorium on evictions for commercial tenants for at least a 3-month period.

Under these measures, any winding-up petition that claims that the company is unable to pay its debts must first be reviewed by the court to determine why.

The law will not permit petitions to be presented, or winding-up orders made, where the company’s inability to pay is the result of Covid-19.

The new legislation to protect tenants will be in force until 30 June, and can be extended in line with the moratorium on commercial lease forfeiture.

Legislation will also be brought forward to prevent landlords using commercial rent arrears recovery (CRAR) unless 90 days or more of unpaid rent is owed.