Campaign calls for legislation to protect hospitality tenants by deferring rent arrears for two years

By James McAllister

- Last updated on GMT

#GiveHospitalityABreak campaign calls for lease forfeiture moratorium extension and legislation to protect hospitality tenants by deferring rent ar...

Related tags: Lease, Rent arrears, Government

A campaign is calling on the Government to confirm another extension to the lease forfeiture moratorium and legislate to allow hospitality tenants to defer half of arrears for two years.

The #GiveHospitalityABreak campaign says that extending the protection for another three months and then allowing tenants to repay only half of the rent owed over the next two years will help the sector avoid mass liquidations, bankruptcies, and winding up orders.

It has previously been reported that ministers are drawing up plans to extend the lease forfeiture moratorium​, which prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the Coronavirus pandemic, beyond the end of March when it is currently due to expire.

However, this is yet to be confirmed.

It is understood that close to £3bn in unsettled rent will have accumulated within hospitality by the end of March.

The campaign points out that turnover across the sector fell by £72bn last year - equivalent to nearly £200m a day in lost sales for businesses - and states that operators would not have survived without the moratorium.

Pleas for the Government to step in and legislate to protect businesses facing huge arrears bills have been growing as the date of the moratorium's proposed expiration draws nearer.

Jonathan Downey, who was instrumental in calling for the introduction of the lease forfeiture moratorium and subsequently founded the Hospitality Union action group to deal with the massive disruption to the industry caused by the Coronavirus pandemic, has called for a rent free period combined with a period of turnover rent.

He told BigHospitality ​last month: “The Government needs to nationally legislate a rent-free period for leisure and hospitality and ensure there’s means in place to compensate landlords for their loss of income. It can be six months or nine months; whatever they think is right given the amount of time the sector has been locked down for.

“Then it needs to follow this with an implemented period of turnover rent, in order to allow businesses the space to build back up once they’re able to open again.”

A recent analysis​ by BigHospitality​ revealed the scale of the rent crisis facing the sector, with a study by commercial property restructuring specialist Cedar Dean finding that 77% of hospitality operators are currently being forced to look at restructuring or insolvency options, with current rents remaining unaffordable for the vast majority of businesses.

To view the #GiveHospitalityABreak petition, click here​.

Related topics: Business

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