UK Government extends lease forfeiture moratorium on commercial properties until September

The UK Government has extended its lease protection policy for commercial entities, taking the pressure off many hospitality businesses who have been closed since mid-March. 

In its Code of Practice for commercial renters impacted by the Coronavirus, the government advises that tenants continue to pay rent where possible, but that landlords show a degree of flexibility, too. 

Originally introduced at the beginning of lockdown, the lease moratorium on commercial rents prevents landlords from evicting tenants, making it illegal to do so. 

Trade representatives have called for an extension to the scheme as it became clear that hospitality businesses would remain closed for longer than originally predicted. 

National Time Out campaign leader Jonathan Downey recently said a phased return to full payment of rent should last until March 2021, to give restaurants, bars and pubs the time to recover and footfall to increase before resuming normal overhead payments. 

UKHospitality applauded the government's decision to extend the moratorium, with chief executive Kate Nicholls commenting the following: “The hospitality sector has seen its income almost totally wiped out by this crisis and therefore businesses simply cannot meet their rent obligations. Although the majority of landlords have been pragmatic, a minority have aggressively pursued tenants that have been closed for months and no ability to pay.

“This code goes some way to bringing together landlords and tenants in the pursuit of a negotiated solution to allow hospitality businesses to move on and revert to the new normal, but this must be recognised as a first step that needs to be built on by all parties.

However, the battle is not yet over for hospitality businesses, she stressed, and added: “Further time and support is needed to facilitate a recovery for the hospitality sector, that is at the heart of our social lives and communities. The moratorium should be extended until the end of the year to keep businesses alive and allow the code to support negotiations to find a solution.

“The reality is that we are now at a point where fiscal support is going to be needed in many cases. It is now the only option if we want to avoid widespread business failures. The Government must consider supporting hospitality businesses who cannot pay rent.”