The communities secretary is facing new calls from retailers to force landlords to waive at least 50 per cent of rent debts accrued during the pandemic.
The Commercial Tenants Association, representing 500 businesses, has written to Robert Jenrick suggesting that the government adopts an Australian-style strategy to deal with rent debt. Under Australia’s rent relief scheme, it was mandatory for landlords to agree to a reduction in rent payable, up to 100 per cent, relative to the reduction in the tenant’s business during Covid-19. The scheme required landlords to waive 50 per cent of the total reduction in the rent payable and accept deferral of the remaining balance paid back in instalments over the remaining time on their lease.
CTA’s founder and chief executive, Peter Bell, said: “What we’re really calling for is for the government to impose a minimum of 50 per cent rental relief, in the form of a waiver to be agreed between the landlord and tenant.
“We’re hoping that arbitration is set up in a way that’s open, fair and transparent. We want to see a fair scenario where tenants are listened to and have an opportunity to present their financial position in private arbitrations versus going to court, which then becomes more public.”
The build-up of £6bn of unpaid rent continued since the government announed in June that it would keep the moratorium on commercial rent going until March 2022. This was implemented to stop businesses failing and being forced out by their landlords during lockdown. However, landlords have become frustrated that larger retailers such as Boots, who have been open during lockdown, have resisted paying their full rent while pushing property owners for new rent deals.
The Commercial Tenants Association notes that rental debt from the first lockdown should be ringfenced until the landlord and tenant come to an agreement. The body says that landlords must offer rental relief of no less than 50 per cent and an offer must be accepted within 21 days before heading to arbitration.
Jenrick has already said that arbitration will be put in place if an agreement can’t be reached between tenant and landlord. However, arbitration is seen as an expensive process.