The British Property Federation (BPF) has urged any business in financial distress on the second rent quarter day of 2020 to speak to their landlord as soon as possible.
Commercial evictions have been extended from June 30th to September 30th, so businesses can’t be forced out if they fail to make a payment in the next three months.
The government published a Code of Practice for commercial landlords on Friday 19 June, which stipulated that landlords and tenants need to act collaboratively and transparently.
Melanie Leech, chief executive of the British Property Federation, said: “As commercial rent quarter day dawns, the majority of property owners and occupiers are working well together, creating shared solutions to mitigate the impact of coronavirus on their businesses.
“Property owners are committed to working hand in hand with their customers through this very difficult time and will balance support for their customers with their duties to investors, who represent the savings and pensions of 45 million people around the country.
“Well-financed businesses, however, who are able to pay their rent should do so. Otherwise, you undermine property owners’ ability to support those businesses who truly need it.”
The Code of Practice said that, for businesses that have sought government support, it should be recognised that this was provided to help them meet their financial commitments.
Both parties should be willing to renegotiate rent where possible, while measures like a rent free period or rent-free period could be agreed.
Leech added: “For any business that is concerned about how it is going to meet its rent obligations, I urge you to refer to the government’s Code of Practice for commercial real estate, published on 19 June, as a way to engage with your landlord.
“Businesses in genuine need of support will find landlords wanting to offer what support they can, and a range of possible options in the Code – including flexibility around rents and other lease terms could include moving from quarterly to monthly rent payments and providing rent deferrals or payment holidays, depending on individual business’ financial circumstances.
“The Code builds on the many examples of good practice and reinforces the importance of constructive collaboration – not only over the next few months and once the government’s temporary legislative interventions come to an end later this year, but for the long term.
“The success of landlords and tenants working together as economic partners is vital to the UK’s recovery and to help ensure that viable businesses in distress as a result of coronavirus are supported, to protect both people’s jobs and the local authorities, savers and pensioners who own the majority of our town centres.”
This post has originally been featured in Property Wire.