Commercial Property: Government introduces temporary ban on legal action against tenants

The Government has introduced new legislation that has temporarily banned property owners from taking legal action against tenants.

The measures have been put in place to alleviate pressure on tenants as the economic impact of the COVID-19 pandemic hits, with the new legislation lasting until at least 30 June 2020.

However, many industry bodies are now calling for more Government support to be issued to landlords, as well as occupiers, with the Treasury acknowledging proposals for a ‘furloughed space grant scheme’, which would see support offered to help with the fixed costs of businesses that are experiencing falls in turnover.

Melanie Leech, Chief Executive of British Property Federation, said: “Government should be prepared to pick up part of the cost. The pain should be spread across the whole of the funding chain, across lenders, landlords and occupiers, but with the Government willing to step in and bridge the gap.”

There have also been calls to ensure that people cannot take advantage of the rules, with Leech adding, “This huge frustration is over those who are well capitalised, war-chesting their own cash and refusing to pay rent.

“Those tenants must step up and start meeting their rental obligations because they haven’t gone away. And the government needs to recognise they have given a license to do that and they need to find the best way of undoing that.”

The introduction of the restriction on legal action has brought the issues for landlords into sharp focus, with many businesses currently experiencing difficulties because of the coronavirus pandemic, the Government is now facing more calls to ensure the future of the commercial property industry.

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