Restaurants relieved as government bans commercial property evictions for three months

Tanwen Dawn-Hiscox

Deputy Editor

The hospitality industry can breathe a sigh of relief today as the government has confirmed plans to introduce a lease forfeiture moratorium, preventing landlords from evicting commercial tenants unable to pay their rent as a result of the coronavirus outbreak.

While various shops and businesses were fearful of not making the 25th March deadline to pay rent on their leased properties given the reduced footfall caused by the coronavirus outbreak, many restaurants, bars and cafes were left in dire straights, having been forced to close on Friday 20/03/20.

UK Hospitality leader Kate Nicholls applauded the news on Twitter, stating that it gave "a valuable pause to allow sensible discussions about realistic payment going forward."

Positive news - Govt has confirmed it has extended the moratorium on lease forfeiture and debt enforcement to commercial leases - eases the pressure cooker of quarter rent day and allows us to focus all available cash on supporting our teams.
— Kate Nicholls (@UKHospKate) March 23, 2020

The main areas of focus, detailed on the UK government website, will be the following: "commercial tenants unable to pay rent because of coronavirus will be protected from eviction"; supporting "ongoing conversations between landlords and tenants about voluntary arrangements" and building "on the unprecedented package of support for businesses already announced."

Last week the hospitality industry was given much needed respite when the enforced closure of restaurants was announced, alongside widespread financial aid which will £300 billion in business loans and guarantees.

Following the announcement, the Chancellor of the Exchequer, Rishi Sunak, said:

"We are taking unprecedented action and doing so at unprecedented speed, because we know that businesses and their employees need help now.

That is why we are taking steps to change the law so that no company can be forced out of its premises due to loss of income. Alongside our support for workers and £330 billion of business loans and guarantees, this will help make a real difference to firms across the country trying to protect jobs."

Meanwhile, Federation of Small Businesses National Chairman, Mike Cherry, said that although "sensible conversations between landlords and commercial tenants are taking place," the legislative backstop would help "prevent evictions during the worst of the crisis will provide much needed peace of mind for many small businesses."

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