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Moratorium ending

Retailers want debt ringfence as rent claims loom

Empty TopShop

More shops could be left empty without help (pic: Terry Murden)

Retailers are braced for legal action from landlords seeking to claw back almost £3 billion in unpaid rent during the Covid pandemic.

A moratorium on aggressive debt collection from commercial landlords will end on 30 June, opening the floodgates to claims.

With many retailers closed for large periods during the last fifteen months, many have accrued huge debts that they are only just beginning to be able to pay.

Retail chiefs want the UK Government to ringfence these rent debts to give shop owners breathing space as they wait for footfall and cash flows to return.

Already, one in seven shops lies empty and this number is expected to rise.

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A survey of retailers by the British Retail Consortium shows that two-thirds of retailers have been told by landlords that they will be subject to legal measures from July.

Almost a third (30%) say they have already faced county court judgements from commercial landlords. Furthermore, 60% of landlords have given tenants less than a year to pay back rent arrears accrued during the pandemic. 

The UK government introduced a code of practice last year to address the outstanding debt issues. Unfortunately, two-thirds of those surveyed described the Code as ‘ineffective’ due to its voluntary nature.

The BRC believes that Government must take steps to resolve the rent debt in a fair and equitable manner want ministers to:

  • Ringfence the rent arrears built up during the pandemic and extend the moratorium on repayment of these debts to the end of the year
  • Extend the protections on these debts to include County Court Judgements (CCJs)
  • Introduce compulsory arbitration from 1 January 2022 using the code of practice, to give teeth to this otherwise weak process

Retailers are running out of time to save their businesses. Where agreement cannot be reached by 1 July between retailers and landlords, many shops will find themselves unable to maintain their presence on high streets, shopping centres and retail parks.

Helen Dickinson, chief executive of the BRC, said: “Many retailers have taken a battering over the pandemic, but they are now getting back on their feet and playing their part in reinvigorating the economy.

“The unpaid rents accrued during the pandemic, when most shops were shut, are a £2.9 billion ball and chain that hold back growth and investment and could result in a tsunami of closures.

“Government must ringfence the rent debts built up during the pandemic, giving retailers breathing space as they wait for footfall and cash flows to return.

“With this in place, all parties can work on a sustainable long-term solution, one that shares the pain wrought by the pandemic more equally between landlords and tenants.

“Without action, it will be our city centres, our high streets and our shopping centres that suffer the consequences, holding back the wider economic recovery.’



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