New rules and legislations are being introduced to the UK real estate market helping landlords and tenants through these turbulent times. 3 key issues addressed so far are evictions, the effects on leisure & retail businesses and business rates relief.
Eviction – The government has implemented a 3-month ban on evictions of commercial tenants. The government will include these measures in their emergency Coronavirus Bill. This means that if a business fails to meet its rental payment, they cannot be forced out of their premises. Nonetheless, The tenants will remain liable for their bills. In the meantime, many landlords have been negotiating voluntary arrangements for rental payments with their tenants.
Retail & Leisure – Retail & leisure tenants are seeking rent holidays from their landlords. This means not paying rent as they are not able to occupy their premises. It is expected that occupiers such as Burger King and Carluccios are amongst hundreds of businesses planning to withhold their rents for the upcoming quarter payment date due on Wednesday. Argent, the landlord at the Kings Cross development will waive rental payments for its retail & leisure tenants for the next 3 months. Additionally, Grosvenor Estates will be waiving rents to its independent and most vulnerable tenants. whilst It is ok for landlords to defer rental payments in the short run if tenants are unable to pay rents for longer periods, landlords could face severe cash flows issues of their own.
Business Rates – as of last week, the UK Chancellor has announced a suspension of all business rates for the hospitality, retail and leisure sector. The suspension will last 12 months. Whilst those in the office sector will not benefit from the suspension, they can apply for empty rates relief with their premises' currently vacant. If this gets approved by the government, businesses will not be required to pay rates for the next 3 months.