The Government has published a new code of practice to provide the commercial property sector with clarity over rental payments during the ongoing COVID-19 pandemic.
The code is voluntary and applies to all commercial leases held by businesses in any sector that has been impacted by the coronavirus pandemic.
It aims to encourage tenants to pay their rent in full if they able to, and also advises those who can’t pay what they can. The guidance also states that landlords should provide support to businesses if they are in a position to do so.
The guidance applies to the UK and encourages tenants and landlords to be transparent in their discussions over rental payments, as well as acting ‘reasonably’ and responsibly while understanding that the impact of the coronavirus has had a significant impact on many businesses’ finances.
The Government has worked with industry trade bodies, including the British Chamber of Commerce, the British Retail Consortium, UKHospitality and the British Property Federation on the code of conduct which encourages more open discussions between property owners and landlords.
There is a push from those in the retail and commercial property sectors to ensure that communication is transparent, and that businesses that can pay their rent, should pay it, but that by equal measure, those property owners that can provide support, should do so.
Kate Nicholls, Chief Executive of UKHospitality, said: “A code of conduct is a significant step in unlocking the current impasse in the commercial property market. Now is the time for all stakeholders to come to the table and broker an agreement.”
Robert Jenrick MP, the Communities Secretary, said that the code of conduct will provide ‘clarity and reassurance’ to property owners and occupiers, as just 14 per cent of the £2.5 billion in rent due was paid by the June quarterly rental deadline.
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