Industry Calls On Government To Adopt Australia’s 50% Rent Relief Scheme

Hospitality sector leaders are urging the government to adopt Australia’s rent relief scheme to help struggling businesses survive beyond the end of the rent moratorium, which is presently in place until 30 June.

Under Australia’s rent relief scheme, the government made it compulsory for:

  • Landlords to agree to a reduction in rent payable, of up to 100%, in proportion to the reduction in the tenant’s business during Covid-19. The scheme required landlords waive 50% of the total reduction in rent payable and accept deferment of the remaining balance paid back in instalments over the remaining time on their lease.
  • Landlords to not draw on a tenant’s security for the non-payment of rent (such as a cash bond, bank guarantee or personal guarantee) during the period of the Covid-19 pandemic and/or a reasonable subsequent recovery period.
  • Banks to offer leniency on payments owed for the duration of the scheme to ensure the landlords remained afloat.

The campaign which is headed by Peter Thornton an Australian and chief financial officer of dining, drinking and live music concept The Piano Works, and David Abramson, chief executive of leisure property adviser Cedar Dean, argue that introducing a similar scheme here in the UK create a practical solution for all parties. “The UK currently does not have a national solution to the rent crisis imposed by the pandemic,” said Thornton. “Viable businesses will be unable to pay rent arrears due to their lack of revenue and the government needs to take drastic action, otherwise we will experience a widespread business collapse and job losses come the end of the moratoria in June.”

“Australia’s rent relief scheme will provide a proven and workable solution that works for both the tenant and the landlord.”

The proposal has also been supported by operators, including Revolution Bars Group chief executive Rob Pitcher; Tom Kidd, co-founder of London bar operator Adventure Bar Group; Menashe Sadik, founding director of Chopstix Group; Alex Salussolia, managing director of Glendola Leisure; and Kevin Todd, chairman of Farmer J, Fafa’s, Upham Pub Company and Which Which.

The government has in recent months come under severe pressure calling to introduce a more vigorous rent protection scheme extending beyond the lease forfeiture moratorium, which prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the coronavirus pandemic.

In response the government earlier this month launched a call for evidence to help monitor the overall progress of commercial rental negotiations and assess whether further steps to protect businesses are needed.

The NTIA which has campaigned for many months regarding the issue of commercial rents, has outlined three important actions operators can undertake to ensure the government is forced to resolve the commercial rent position for thousands of night time economy businesses

  • Email your MP asking them to challenge government on the current position on commercial rents & to engage in the night-time economy APPG on commercial rents
  • Send bespoke letter to your MP if you would prefer to write a bespoke letter from your business to your local MP the following link will give you a head start!
  • Submit evidence to the enquiry the government have called for evidence on the current situation with commercial rents, all evidence must be submitted by11.45 pm on Tuesday 4th may

Michael Kill CEO NTIA Says: “Businesses Owners will continue to take on further rent debt through this period, which will inevitably compromise their future. This needs Government intervention and will require lead departments to use this period between now and the end of June to address these issues and look at potential solutions where the stakeholders share the burden of debt from rent arrears. Consideration needs to be given to a more robust code of conduct which would require some mandatory elements within it, similar to the Australian model, ensuring that each stakeholder comes to the table to resolve this current situation”

“Thousands of businesses have been lost already, with many employees and freelancers, hanging off every announced press statement. With the acknowledgement by the PM of the immense commitment of businesses and the nation in support of the Public Health Strategy by the Prime Minister, out of courtesy would it be too much to ask the Government to place greater importance on timely communication given the gravity of some of these announcements”

‘We need your support to ensure the Government understands the depth of the problem by contacting your constituent MP’s asking them to actively challenge the Prime Minister on the current Commercial Rent Issue’