It says the code will help guide and encourage all parties to work together to protect viable businesses and ensure a swift recovery.
A working group has been established by the Government, with the help of the commercial rental sector, to develop the code, which will encourage fair and transparent discussions between landlords and tenants over rental payments during the Coronavirus pandemic; and provide guidance on rent arrear payments.
The code will also consider the treatment of sub-letter and suppliers, in the hopes of enabling collaboration and cooperation within the sector and helping to ensure no one within the chain shoulders the full burden of payment.
According to the Government, the group will also seek to involve wider business input through its sector members, to ensure a greater number are consulted and able to share their views as the code is established.
The code will be temporary in nature, however the Government will explore options to make it mandatory if necessary.
“A code of practice can be a significant step in unlocking the current impasse in the commercial property market," says UKHospitality cief executive Kate Nicholls, responding to the announcement.
"Hospitality businesses have been hammered hard by the Covid-19 crisis and seen revenues all but dry up since March. This code should provide a mechanism to agree rent waivers or reductions for the crisis period. To enable this to happen Government will need to extend the moratorium on enforcement activity that is currently being introduced.
“It is vital that the code of practice is enforceable so that the burden currently borne by operators is shared more equitably. This code could be pivotal in protecting communities and high streets from mass closures and job losses.
“We hope the Government follows this with wider support on rent. We have proposed a summit to determine solutions that will mutually benefit landlords, tenants and the communities in which they operate, and we stand ready to facilitate in any way we can.”
The announcement comes as UK Finance confirms its members’ continued support for commercial landlord customers, including amendments to facilities and capital payment holidays.
