New code of practice to protect commercial tenants from eviction

A new code of practice will protect commercial tenants who are struggling to make rental payments due to Covid-19, the Government has said.

Announcing the new rules, Communities Secretary Robert Jenrick claimed the code will help “guide and encourage” all parties, such as the landlord, tenant, and lender, to work together to safeguard viable businesses.

This includes providing advice on how to conduct “fair and transparent discussions” over rental payments and guidance on rent arrear payments and the treatment of sub-letters and suppliers.

“This will enable collaboration and cooperation within the sector and help ensure no one part of the chain shoulders the full burden of payment,” said Mr Jenrick.

He added: “We are giving clarity to landlords and tenants who are both facing equal pressures on their finances so they are all able to stabilise their finances and bounce back.”

The voluntary code – which could be made mandatory “if necessary” – is set to be published prior to the next quarterly rent payment date.

Welcoming the new code of practice, Melanie Leech, Chief Executive of the British Property Federation, said Covid-19 disruption is “placing an unprecedented strain” on property owners and the businesses who occupy their buildings.

“Fair collaboration among lenders, property owners and tenants is vital to the UK’s recovery and it will 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.”

The code comes after the Government temporarily banned the use of statutory demands between 1 March 2020 and 30 June 2020 and winding up petitions presented from Monday 27 April, through to 30 June, where a company cannot pay its bills due to coronavirus.

For more information on the ban on evictions for commercial tenants who miss rent payments, please click here.

If you are a commercial tenant or landlord and require legal advice, please get in touch with our expert team today.