The moratoriums on the commercial property sector introduced by the government are now only providing a reason for bad behaviour within a small section of the market, which will lead to small property owners losing revenue and halt investment in town centres, according to the British Property Federation (BPF)
According to Property Reporter, the latest data from the BPF points to the majority of property owners and tenants working closely together to resolve rent issues, meaning that previous fears of mass evictions, legal action, and landlords acting aggressively have not come to pass.
The data from BPF comes from a study of 16,320 retail, hospitality, and leisure property leases in the UK. It showed that 50 per cent of rent owned from March 2020 has now been paid, and landlords and tenants have reached an agreement on a further 27 per cent, with new payment plans, waivers, rent holidays, and deferrals agreed.
This leaves 23 per cent of unpaid rent unaccounted for, where landlords and tenants have been unable to agree on how best to settle debts and move ahead. According to the study, 14 per cent of tenants are refusing to communicate with property owners, despite landlords’ pro-active approach to work collaboratively and find an agreement.
This small group of tenants reportedly includes well-capitalised businesses who have continued to trade throughout the pandemic, and are now abusing landlord and government support by continuing to withhold rents.
Such tenants are not adhering to the Government’s Code of Practice – a framework for property owner-tenant rent discussions – which makes clear that tenants must:
• pay service and other charges in full;
• pay as much of their rent as they can afford; and
• seek agreement from property owners where support is needed.
The guidance makes clear that where tenants have received government subsidies or reliefs, this financial support must be used by tenants to help them meet their commitments such as rent and insurance, utilities and service charges.
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