With the Lease Forfeiture Moratorium, which prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the Coronavirus pandemic, and accompanying debt protections set to expire at the end of June, the call for evidence will' support the Government’s decision making on the best way to withdraw or replace these measures'.
If there is evidence that productive discussions between landlords and tenants are not taking place, and that this represents a substantial and ongoing threat to jobs and livelihoods, the Government says it will not hesitate to intervene further.
The call for evidence sets out six options, ranging from simply allowing existing tenant protections to cease to a more targeted level of support to having binding adjudications.
Pressure has been growing on the Government to try and find a permanent solution to the hospitality sector's growing rent debt, which is understood to be higher than £2bn.
Trade body UKHospitality has welcomed the publication of the Government’s call for evidence, describing it as an important step forward in attempts to address commercial rent debts accumulated by hospitality tenants during Covid lockdown and restrictions.
“It is very positive that Government has finally appreciated the need to consider additional measures in the commercial lease market," says Kate Nicholls, UKHospitality chief executive.
“After a year of lockdown and restrictions rent debt in the hospitality sector has topped £2 billion and businesses still face months without being able to trade profitably. This level of debt simply cannot be paid off in the short-term. There must be sustained and targeted support to allow tenants and landlords to reach agreement. This must include measures from landlords to write off a level of Covid-related debt.
“It is encouraging that Government has recognised that uncertainty over reopening dates has made it almost impossible to find agreement, and even after reopening it will take time for businesses in sectors like hospitality to return to pre-pandemic trading levels.
"As Government has recognised it will take longer for our sector to adjust and that is why ongoing protection is needed. All businesses will hope to reach an amicable agreement with their landlords but as the document highlights the risk of failure to do so is further economic harm, leading to higher unemployment."
The Government is seeking views from businesses; business representative organisations; commercial landlords, lenders, and investors and their representative organisations; commercial property professionals; and anyone with an interest in or connection to the commercial property market in England.
It is also particularly interested in the views of small to medium sized businesses (SMEs) including small commercial landlords, independent businesses and sole traders with leased premises.
The call for evidence closes at 23:59 on 4 May, and is open here.