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Coronavirus

Two-thirds of retailers face legal action in july over rents, warns BRC

Research conducted by the group shows that 30% of retailers have already faced County Court Judgements (CCJs) from commercial landlords

Two-thirds of retailers have been told by landlords that they will be subject to legal measures from July, once the moratorium on aggressive debt enforcement ends, according to the British Retail Consortium (BRC). 

Research conducted by the group shows that 30% of retailers have already faced County Court Judgements (CCJs) from commercial landlords. 

Furthermore, 80% of tenants said some landlords have given them less than a year to pay back rent arrears accrued during the pandemic.

The moratorium on aggressive debt collection from commercial landlords will end on 30 June – with the BRC believing that it will open “thousands of retailers to legal action”. 

Total rent debt is estimated to be £2.9bn and many retailers have “accrued huge debts” that they are only just beginning to be able to pay as shops resume normal trading. 

While the government introduced a ‘Code of Practice’ last year to address the outstanding debt issues – two thirds of those surveyed described the code as ‘“ineffective” due to its voluntary nature. 

Now the BRC has stated that the government must give the code “greater weight” and take other measures to support tenants and landlords.

Helen Dickinson, chief executive of the BRC, said: “The unpaid rents accrued during the pandemic, when most shops were shut, are a £2.9bn 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.”

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