The Future of the High Street Starts Here
The excitement of the opening up of our high streets this week is tempered by the underlying nervousness about what our commercial and shopping areas will look like after the carnage of the past year. Never before have businesses had to innovate more quickly or negotiate harder for their very survival.
The future looks bright at last but the legacy of the pandemic is that in large part neither landlords nor operators have seen much in the way of income for an entire year. Many of them are locked in negotiations with each other to try to arrive at a workable solution to keep them going until the sector reaches its new equilibrium. In many cases those negotiations have reached a stalemate.
The moratorium on forfeiture and the restrictions on recovery of rent arrears are due to end on 30 June 2021. The Government has launched a call for evidence which closes on 4 May and considers six options for what will happen next.
The Government has also published a a new annex to the (voluntary) Code of Practice for commercial property relationships during the Covid-19 pandemic. The Annex is a form for a tenant to complete about the impact of the pandemic on their ability to pay rent and service charges from 25 March 2020 and a form for a landlord to complete in responding to an offer from a tenant in relation to the payment of rent and service charges. The stated objective of this is "To ensure that should a case require the courts' involvement, documentation in addition to the necessary forms to satisfy the requirements of pre-action conduct and protocols is available to facilitate a prompt outcome from the judicial process."
Whatever the outcome, it is clear that there will be significant space that landlords will want to fill. This coupled with the changes in planning law that have broadened the use classes in a way that makes innovative new mixed concepts more easily achievable creates the best opportunity that there has been for years for entrepreneurial operators move in. And this could spell the start of the most exciting changes in living memory to our retail, living and leisure environments.
From April 12, an easing of restrictions meant that outdoor pubs, non-essential retailers and hairdressers were allowed to reopen in England. But many of those businesses have built up rent arrears over a full year and the concern for tenants and landlords is what happens to that debt as the economy tentatively restarts.
