The Government is to introduce temporary new measures to safeguard the UK high street against aggressive debt recovery actions during the coronavirus pandemic.
Business Secretary Alok Sharma asked for landlords and investors to work collaboratively with high street businesses unable to pay their bills during COVID-19 pandemic.
He said the majority of landlords and tenants are working well together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics.
To stop these unfair practices, the government will temporarily ban the use of statutory demands and winding up orders where a company cannot pay their bills due to Coronavirus, to ensure they do not fall into deeper financial strain.
The measures will be included in the Corporate Insolvency and Governance Bill, which Mr Sharma set out earlier this month.
The Government is also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.
“In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic,” said Mr Sharma.
“Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme.
“I know that like all businesses they are under pressure, but I would urge them to show forbearance to their tenants.
“I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the COVID-19 emergency continues.”
The temporary emergency measures are designed to acknowledge the pressures landlords are facing while encouraging cooperation in the spirit of fair commercial practice.