Government to stop 'aggressive rent collection' against coronavirus hit businesses

New rules preventing landlords from putting pressure on businesses that can't pay their rent due to the COVID-19 pandemic are to be introduced.

The government said most landlords and tenants are working well together to reach agreements on debts, but some are using agressive tactics to recover unpaid bills.

As a result, the use of statutory demands (made between 1 March 2020 and 30 June 2020) and winding up petitions (presented from 27 April 2020 - 30 June 2020) where a company cannot pay due to coronavirus will be temporarily banned.

Included in the Corporate Insolvency and Governance Bill, the legislation will stop landlords using the demands unless they are owed 90 days of unpaid rent.

Business secretary Alok Sharma, said: "I know that like all businesses [landlords] are under pressure, but I would urge them to show forbearance to their tenants.

"I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the COVID-19 emergency continues."

Kate Nicholls, chief executive of UK Hospitality, added: "Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for some.

"This extra space will allow businesses to survive and to find a way to work with landlords. If social distancing measures are to be in place for some time, as we now believe they will, this measure may need to be extended to ensure that businesses can survive."

Communities secretary Robert Jenrick said the government recognised that landlords face serious pressures too so urged tenants to pay rent where they can.

"We are working with banks and investors to seek ways to address these issues and guide the whole sector through the pandemic," he added.

In a call with the small business minister Paul Scully, Enterprise Nation founder Emma Jones suggested that the government extend grants for companies paying business rates to other firms including co-working spaces and their tenants.

The government has already announced a moratorium on evictions for commercial tenants for at least three months.

The latest coronavirus support information

We are keeping you updated on the latest information on how to access the government's coronavirus business support here. You can also find advice and ask a question on Enterprise Nation's coronavirus business advice hub. Follow Enterprise Nation on Twitter too for updates.