Recommendation 16

HM Government Acknowledged

56. The Government should use the time afforded by current time-limited support measures wisely to identify long-term solutions. The Government should consider active measures to address the issue of growing commercial rent arrears, and proactively work with businesses, landlords, banks and other stakeholders to identify an appropriate long-term solution. (Paragraph 51) 57. The tenant protection measures introduced by the Coronavirus Act 2020 and the Corporate Insolvency & Governance Act 2020 are designed to give tenant businesses protection from the threat of eviction, and aggressive debt recovery practices at a time when many have been unable to trade normally. The Government has stressed throughout the pandemic the need for landlords and tenants to work together to resolve issues of accumulated rent arrears and ongoing lease terms. To aid these discussions, the Government published the voluntary Code of Practice in June 2020 to guide landlords and tenants in how to conduct such negotiations. This was recently supplemented with additional guidance on how tenant businesses should frame negotiations with their landlords. The Code of Practice and additional guidance can be seen here www.gov.uk/ government/publications/code-of-practice-for-the-commercial-property-sector. 58. These measures are temporary and are due to expire on 30 June 2021. The Government has always been clear that the best solution to the issues of accumulated rent arrears and ongoing lease terms is for there to be market led negotiations and agreement between landlords and tenants that reflect the individual and unique circumstances of both. However, if this does not happen, the Government is ready to intervene further as necessary and has therefore launched a Call for Evidence to gather first-hand information on how negotiations have progressed and the extent of accumulated rent arrears. 59. Stakeholders’ views will also be sought on a long-term solution including a range of options for ending the tenant protection measures, including options for their gradual withdrawal, measures targeted towards the hardest hit sectors, and the encouragement or requirement to engage in the mediation or adjudication, be it binding or non-binding, of rent disputes. The Call for Evidence can be seen here consult.communities.gov.uk/urban- policy/commercial-rents-and-covid-19-call-for-evidence/. 60. There is no one-size-fits-all solution to these issues. The Government’s world leading package of direct financial and other support for businesses during the pandemic has enabled businesses to remain in their premises, retain their staff, and be ready for the recovery. Many landlords and tenants have used this time to agree new lease terms which address accumulated rent arrears and sustainable rents going forward. The extension of these measures to 30 June provides a further period of stability and certainty during which those that have so far failed to engage or to reach agreement should make every effort to do so.