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Mark Appleton
Mark Appleton,
PARTNER
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Hospitality and Leisure - COVID-19
09 June 2020

Hopefully you will have seen the Article written by my colleagues Darryn Harris and Russell May relating to “Commercial Landlords Prevented from Commencing Winding Up Petitions for Unpaid Rent”.

This provides a useful summary of new legislation put in place by the Government which help tenants who are having difficulties in paying their rents by imposing further restrictions on Landlords seeking to aggressively enforce demands for rent arrears from their Tenants.

The Government has been remarkably quick at bringing in some assistance for commercial tenants including business rates relief.

However ultimately the rent must still be paid and Landlords may have other solutions such as dipping into any rent deposit that has been paid or taking action against any Guarantors. It is crucial to keep a dialogue going with your Landlord.  Many are listening and offering Tenants rent free periods or reduced rents or monthly (rather than quarterly) rental payments. Others including institutional Landlords may be more interested in protecting the value of their investments - rather than helping its Tenants. However if you can Lease can terminated under a break clause or has expired or coming up to its renewal date the Tenant will be able to exert a lot of pressure on the Landlord to give some concessions.

However already the Press is already criticising Travelodge for dictating terms to their Landlords to make short term deferrals – and also  Superdrug for demanding 75% rental cuts – even though Superdrug stayed open during the lockdown. There has to be some give and take on both sides.

It is clear that the industry will need to move with the times and impose even stricter requirements on their employees in dealing with customers. In restaurants employers will have to  provide face masks, gloves and screens to safeguard clients during th preparation and service of food and bring in new systems so for example that customers can order food and drink from their table rather than at the bar (such as Weatherspoon’s) and cashless payment systems.

The sector has been decimated by the lockdown and only time will tell whether it can fully recover. Alok Sharma is being urged to intervene and try to prevent widespread job losses and business failures across the hospitality and leisure sector.

It is certainly hoped that there may be a surge of retail spending when the lockdown is finally lifted. Certainly this was the case in China but many European countries have seen that people  are remaining very cautious.

It will be welcome if the Government does indeed proceed to allow pubs and restaurants to use streets and open spaces for “al fresco” dining and drinking so that we can remain socially distant but at least enjoy the luxury of going out for dinner.

For more information about how the Leisure and Hospitality team can help your business during this trying time please contact them by email on [email protected].

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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