Measures to protect the high street

It was announced last week (23 April) that high street shops and other companies under strain will be protected from aggressive rent collection.

The majority of landlords and tenants are working well together to reach agreements on debt obligations, however some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics.

To stop these practices, the government will temporarily ban the use of statutory demands and winding up orders where a company cannot pay their bills due to coronavirus. The measures will be included in the Corporate Insolvency and Governance Bill, which the Business Secretary Alok Sharma set out earlier this month.

Under these measures, any winding-up petition that claims that the company is unable to pay its debts must first be reviewed by the court to determine why. The law will not permit petitions to be presented, or winding-up orders made, where the company’s inability to pay is the result of coronavirus.

The new legislation to protect tenants will be in force until 30 June, and can be extended in line with the moratorium on commercial lease forfeiture.

The government is also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.

The announcement: https://www.gov.uk/government/news/new-measures-to-protect-uk-high-street-from-aggressive-rent-collection-and-closure

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