Thousands of gyms, restaurants and retail outlets in the UK will be going out of business if the government fails to extend protection from rent enforcement activity.
That is the message from three leading industry bodies, representing more than 80,000 members from across the leisure, hospitality and retail sectors.
ukactive, UK Hospitality and British Independent Retailers Association (BIRA) have joined forces to call for the government to immediately extend the Moratorium of Forfeiture until at least October 2020.
The move would offer tenants protection from landlords taking legal action against unpaid rent.
In April, industry bodies successfully lobbied the government to amend the Coronavirus Act to restrict tactics being adopted by landlords, who were insisting tenants – including gyms and leisure centres – pay rent that had been withheld as a result of COVID-19.
The protective measures introduced in April, however, will expire at the end of June.
This means gym operators and other tenants will be liable for rent payments they potentially cannot afford – forcing many to close down as they’re threatened with legal action through statutory demand notices and winding-up orders.
The government is currently developing a new Code of Practice designed to support businesses – but timelines mean there will be insufficient time for it to influence the expected rent demands on 24 June.
Any business faced with a winding up order from its landlord would have its accounts frozen and be unable to pay staff, including those on furlough – meaning some would have to make redundancies.
ukactive, UK Hospitality and BIRA have now written to Secretary of State for Housing, Communities and Local Government, Robert Jenrick to highlight their concerns.
“We are deeply concerned that no progress has been made in extending the Moratorium of Forfeiture over the past week, leaving our members vulnerable to legal action, redundancies and, ultimately, permanent closure,” said Huw Edwards, CEO of ukactive.
“Businesses across the nation are extremely vulnerable to legal action from landlords at a time when they remain legally closed and have had no income for the past 12 weeks.
“Our gyms and leisure facilities are ready to reopen safely when called upon, and to play a key part in restoring our communities’ health and wellbeing, but they must be allowed to get back on their feet first.
“We will continue to support the Government in developing a Code of Practice that is fit for purpose, but until then we must see urgent action to protect our sector from upcoming rent demands.”
Kate Nicholls, CEO of UKHospitality, added: “The stand-off over rent is perhaps the biggest threat to the future of the UK’s hospitality sector.
“The majority of businesses have had virtually no income for months, but are still being chased by a minority of landlords over rent.
“Some businesses have no way of paying, but are still being pushed right at the moment when we are trying to plan the reopening of the sector.
“We need to find a solution that benefits both landlords and tenants and enables us all to share in the pain that the crisis has caused. If we are going to find a workable solution then we need time; time to plan, reopen and negotiate.”