April 23, 2020 / 6:29 PM / a month ago

Britain's government will nullify commercial landlords' legal attempt to evict tenants

FILE PHOTO: A Primark store is seen, as the spread of the coronavirus disease (COVID-19) continues, in Milton Keynes, Britain, March 23, 2020. REUTERS/Andrew Boyers

(Reuters) - Britain’s government will void legal attempts to evict or force out small retailers and businesses due to non payment of rent during the coronavirus crises, it said on Thursday.

The country’s commercial landlords are experiencing a significant curtailment in rents as retail activity has paused temporarily due to lockdown measures to curb the spread of the virus.

The government’s move comes just a few days after trade bodies British Retail Consortium and British Property Federation wrote a letter to chancellor Rishi Sunak seeking rental support.

According to reports, landlords have served winding up petitions to their tenants, with JD Sports (JD.L) and Primark being among the top retailers refusing to pay their March quarter rents.

“Government should be robust in encouraging landlords and tenants to work together and making clear that those businesses who are able to meet their liabilities should do so”, British Property Federation’s Chief Executive Officer Melanie Leech said. “To stop these unfair practices, the government will temporarily ban the use of statutory demands and winding up orders where a company cannot pay their bills due to coronavirus, to ensure they do not fall into deeper financial strain”, government said in a statement on Thursday.

“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”.

Communities Secretary Robert Jenrick noted that landlords are facing their own “very serious pressures” and are concerned about their position with lenders.

The minister added that the government is working with banks and investors to seek ways to address these issues.

Overall rent collection for March quarter date fell by 28.7% in the UK, according to cloud-based commercial property management platform Re-Leased, which collected data from 10,000 properties and 35,000 leases on its platform.

Reporting by Samantha Machado in Bengaluru; Editing by Patrick Graham, Bernard Orr

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