Code of Practice for Commercial Tenants



It would be fair to say that relationships between commercial landlords and their tenants have been tested throughout the COVID-19 pandemic.


The above, in fact, might just be the understatement of the century…


For very understandable reasons, the Government brought in moratoriums on eviction within the commercial sector, as well as preventions on landlords seizing tenants’ goods in lieu of rent.


The whole idea was to try and protect the various different commercial sectors (hospitality, retail, leisure etc.) for as long as feasibly possible…and then a bit more.


The idea behind all this was to protect businesses, which would in turn protect jobs, which would then protect families from facing hardship as a result of COVID-19.


Now, we know that this wasn’t universally successful, and that many businesses (big and small) did have to close their doors permanently as a result of the pandemic.


Unfortunately, this meant that jobs and livelihoods were indeed lost, resulting in many thousands of families facing hardship in a variety of forms.


But what happens now?


The sectors which were forced to close are now, for the most part at least, back up and running, but the commercial rent arrears accrued during the 18 months or so of the pandemic, by and large, still exist.


Landlords took the hit at the time, with many risking their own solvency as a result, in the hope that they would eventually be able to claim back what they were owed.


And so, we have the release of the Government’s ‘Code of Practice for Commercial Tenants’ which aims to set out how the debts should be paid.


In a nutshell, and according to Ministers, the Code states that:


  • where it is affordable, a tenant should aim to meet their obligations under their lease in full.


  • the preservation of the tenant business’ viability should not come at the expense of the landlord’s solvency.


  • It also explicitly states that tenants should never have to take on more debt – or restructure their business – in order to pay their rent?


Sounds simple enough, right?


Yes and no.


There are a great number of factors and variations which affect each and every relationship between commercial landlord and tenant. You can read the Code in full here:


https://www.gov.uk/government/publications/commercial-rents-code-of-practice-november-2021/code-of-practice-for-commercial-property-relationships-following-the-covid-19-pandemic


For now, though, it’s good to see that things are starting to move and that the sacrifices made by both sides of the arrangements are being acknowledged.


It will take time, but the publication of Codes like this mean that the timeframe is getting ever shorter.


Commercial landlords, hang on in there.


You’ve waited this long, and now you should start to get back what is owed to you, or at least be able to take back what is yours.

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