New measures will aim to protect UK high street shops from aggressive rent collection and closure.
This comes as the Government confirmed it plans to introduce temporary new rules to safeguard the UK high street against aggressive debt recovery actions during the coronavirus pandemic.
The business secretary set explained how the majority of landlords and tenants are working well together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics.
To stop these unfair practices, the government will temporarily ban the use of statutory demands and winding up petitions presented from April 27 through to June 30 where a company cannot pay its bills due to coronavirus.
It aims to help ensure these companies do not fall into deeper financial strain.
Government confirmed the measures will be included in the Corporate Insolvency and Governance Bill, which the Business Secretary Alok Sharma set out earlier this month.
Government is also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.
The business department says this will further safeguard the high street and millions of jobs by helping to protect them from permanent closure during this time.
However, while landlords are urged to give their tenants the breathing space needed, the government calls on tenants to pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too.
Business secretary, Alok Sharma, said: “In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic.
“Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme.”
Adding: “I know that like all businesses they 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.”
The temporary emergency measures are designed to acknowledge the pressures landlords are facing while encouraging cooperation in the spirit of fair commercial practice.
They also come on top of a substantial package of business support measures, including a moratorium on evictions for commercial tenants for at least a 3-month period.