Retailers call for half of rent backlog to be waived

The Commercial Tenants Association is calling on the government to adopt a different strategy to deal with commercial rent debt

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.  

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Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business.

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2 replies on “Retailers call for half of rent backlog to be waived”

  1. Although I have sympathy for those businesses who are in the situation of being in debt with their landlord, is it fair that those business owners who did pay their rent by utilising reserves or personal funds receive no rebate? How about mortgage companies: will they write off business loan non-payments?
    It seems to me that if as a business owner you do “the right thing” by your creditors, you are being laughed at by other businesses who expect someone else to bail them out.
    On a further point. Landlords are also businesses. Is it fair to pass on on the problems of one business to another to deal with?

  2. What do you think landlords who are not making a penny already. I have a bank charging 7.25 percent mortgage. My tenants are not paying rent yet have had government funds. Two have bought new cars! When will you people recognise that landlords are close to hands the keys into the bank and go bankrupt.
    Wake Up. Stop being so naive!

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