Government ministers are considering proposals to block landlords from evicting hospitality businesses that have fallen into arrears as a result of COVID-19 and should reach a decision this week.
The Guardian reports that the plans to ring-fence historic debt built up by pubs, restaurants and bars during the pandemic would allow hospitality businesses to continue negotiations with landlords, rather than needing to find and divert large sums of cash to settle debts.
It could mean that landlords who have not managed to reach an agreement with hospitality tenants will be unable to evict them when the lease forfeiture moratorium ends on 30 June.
Both Downing Street and the Treasury are believed to have been involved in meetings to discuss what support could be offered to pubs and restaurants, particularly after the Prime Minister announced that the 21 June ‘Freedom Day’ has been delayed by four weeks until 19 July.
A government source told The Telegraph that discussions had included what has been terms an ‘Australian model’, which has already been discussed by hospitality chiefs, as a solution to mounting debt.
Under Australia’s rent relief scheme, it was made mandatory for landlords to agree to a reduction in rent payable, of up to 100 per cent, in proportion to the reduction in the tenant’s business during COVID-19.
The scheme mandated landlords waive 50 per cent of the total reduction in rent payable and accept deferral of the remaining balance paid back in instalments over the remaining time on their lease.
Landlords were also forbidden from drawing on a tenant’s security for the non-payment of rent during the period of the COVID-19 pandemic and/or a reasonable subsequent recovery period, with banks told to offer leniency on payments owed for the duration of the scheme to ensure landlords remained afloat.
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