The gloves are off. Some landlords are getting nasty at failed rent payments and heading to court and winding up orders to get their Covid-19 hit tenants out. But will the courts, the government and business organisations stand by and watch the robber barons get their way?
High street businesses and pubs across the country are facing the decision to continue paying rent despite being closed for business. GVC Holding, withheld rent payments last week on more than 3,000 shops, although it insisted that it would make up the deficit when “normal” trading conditions resume. Elsewhere, however, other businesses are being taken to court over such actions. The Mail reported that ‘industry insiders’ have confirmed that the number of rent disputes between commercial property landlords and tenants hit 200 last weekend. Around two-thirds of these are understood to involve legal threats – such as taking tenant firms to court to freeze their bank accounts and having companies wound up.
Kate Nicholls, chief executive of UKHospitality, said: “We have seen the first statutory demands served on premises within the sector and cases will now proceed to court with bank accounts frozen and insolvency triggered unless debt is paid.”
Despite many pubcos deferring rents for their tenants, there have also been calls for pubcos to cancel them completely in recent weeks. The BBPA, however, has dismissed the idea, arguing that government grants are available and that pubcos have their own bills to pay too.
Writing to the Morning Advertiser, pub management company All Our Bars chief executive Paul Wigham called the BBPA’s comments ‘ill advised’ and ‘perhaps insulting’, arguing that rent should be waived for the duration of the pandemic and then stepped back up on a quarterly basis. He believes pubcos should take the hit rather than tenants, and that they can apply for the government grants. If not, he says, there may not be a retail sector left for landlords to provide property for. “When the support money runs out – and who knows how long the crisis will last – many retailers will simply refuse to borrow to pay unhelpful landlords and will lay off even more staff or wind up the business. This has started already with ‘household name’ casualties including Carluccio’s and Debenhams,” he said.