// UK Government places temporary ban on landlords issuing statutory demands & winding up orders over unpaid rent
// A statutory rent demand issued by the landlord gives retailers 21 days in which to pay their owed rent
The UK Government has implemented a temporary ban of statutory demands and winding up orders where a retailer is unable to pay bills due to the Covid-19 crisis.
Business secretary Alok Sharma set out the temporary ban which will also prevent landlords using Commercial Rent Arrears Recovery (CRAR) to collect rent unless they are owned 90 days of unpaid rent.
CRAR allows a landlord to collect overdue rent without the need for a court order.
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The Department for Business, Energy and Industrial Strategy (BEIS) said the temporary measures would “safeguard the UK high street against aggressive debt recover actions” during the pandemic.
BEIS has urged landlords and investors to “work collaboratively” with high street businesses struggling to pay rent on stores forced to close due to the lockdown.
Meanwhile, the government called on landlords to “give their tenants the breathing space needed” during this period.
However, it also said occupants could “pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too”.
“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,” Sharma said.
“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.”
BRC chief executive Helen Dickinson said: “Rents are a huge burden for retailers that must be paid even where shops are closed.
“We have raised this problem with government and today’s announcement protects firms who – during these extraordinary times – are unable to meet their rent obligations.”
On Thursday, the BRC warned the government that retailers will need several weeks’ notice to plan the reopening of shops to secure personal protective equipment (PPE) for staff in the wake of coronavirus.
The trade organisation wrote to Sharma to highlight the logistical considerations the retail sector is likely to face once the lockdown is lifted.