For most businesses, after workers salaries, rent is often the biggest outgoing. For many worrying about paying rent through lockdown, there is good news. Last week, the government announced that commercial landlords have been blocked from evicting small businesses until the end of September. It is clear that continued rent demands on stores around the country, even when they have been closed for business, has the potential to make the situation even worse. So, small businesses struggling to stay afloat will now be safe in the knowledge that for the next three months they are safe.

Announced in a new code of practice for landlords and tenants, the government extended the measure which was due to expire on the 30th June, in light of many companies struggling to pay rent as demand for products drop.

  • The Coronavirus Act will extend the rule on evictions to the 30th September, meaning no business will be forced out, even if they miss a payment in the next three months.
  • Landlords will be unable to use Commercial Rent Arrears Recovery unless they are owed at least 189 days of unpaid rent.
  • The Corporate Insolvency and Governance Bill has been amended to temporarily ban winding up petitions and statutory demands until the 30th September.

Tenants are encouraged to pay their rent in full if they can do so and landlords are encouraged to also support businesses, if they are able to. Indeed in the majority of cases, both small business tenants and landlords have been working together amicably.

Since lockdown, commercial landlords themselves have reported massive falls in rent as revenues everywhere have fallen. Property companies themselves will be facing their own difficulties, and will be dealing with requests from their own creditors.

What will happen after the 30th September is an important question and some in the business community are already suggesting that the block will have to be extended again. Even with the two-metre rule being relaxed to the one-metre plus rule, many smaller establishments will struggle to make opening feasible, and it looks like many businesses may have to remain closed.

If you wish to keep up to date with the latest business news, check back regularly to this blog. Or if you'd like to find out more about our affordable business websites, don't hesitate to get in touch with us at DotGO.