Government to publish temporary Code of practice with commercial sector for rental payments

The Government on 29 May announced that it is working with leading businesses and trade associations to publish a new code of practice to support high street businesses through coronavirus. The Code will help guide and encourage all parties to work together to protect viable businesses and ensure a swift recovery.

A working group has been established by the Government with the commercial rental sector to develop a Code which encourages fair and transparent discussions between landlords and tenants over rental payments during the pandemic and guidance on rent arrear payments. This will enable collaboration and cooperation within the sector and help ensure no one part of the chain shoulders the full burden of payments.

The group will seek to involve wider business input through its sector members to ensure a greater number are consulted and able to share views.

Members of the working group currently include British Chambers of Commerce, British Property Federation, British Retail Consortium, Commercial Real Estate Finance Council, Revo, Royal Institution of Chartered Surveyors and UK Hospitality.

The British Property Federation said that the majority of property owners and tenants are already working well together, effectively engaging and agreeing sustainable plans.

The Code will be temporary in nature and the Government will explore options to make it mandatory if necessary. The Government will engage with Devolved Administrations to ensure the Code applies across the UK and are working to publish it prior to the next quarterly rent payment date in June.

The Government has said that it continues to work with lenders to ensure flexible support is provided to commercial landlords, including payment holidays and restructuring facilities. UK Finance has confirmed its members’ continued support for commercial landlord customers which include amendments to facilities and capital payment holidays. Ahead of the June payment day, all the main commercial lenders will be in contact with their major commercial landlord borrowers to identify concerns they have and provide support where appropriate.

Further detail on the contents of the Code is awaited.