Proplend chief Brian Bartaby has called for the government to scrap its “unfair” moratorium of commercial property rents.
Bartaby (pictured), founder and chief executive of commercial property peer-to-peer lending platform Proplend, criticised the government for “wrongly” implementing a moratorium in March on commercial landlords to prevent them from evicting clients for not paying their rent for 90 days.
Last month this moratorium was extended until the end of September.
“This gives tenants the ability to decide if they want to pay rent which is totally wrong,” Bartaby said.
“The government has turned around and said that you don’t have to pay if you don’t want to.
“It’s just a free for all. There are companies who can’t afford their office rent and are taking advantage of the moratorium and there are companies who can afford it but are using this and not paying the rent.
“It is unfair. A lease is a legal contract and the government has decided to go against what it says and should remove it.”
Bartaby said that the government did talk about a property furlough scheme, which could have been a good idea, but didn’t get it off the ground and it’s probably too late for it now.
He said at the end of the moratorium companies will just end up walking away from it, not having paid their rent, and this will affect other sectors as well.
“A lot of pension companies have funds in commercial property and will take a hit too,” he said.
Bartaby said 96 per cent of Proplend’s borrowers paid interest this month because their tenants have been paying.
“Some borrowers are still making payments because they are contractually obliged to do so as are their tenants,” he said.
Heather Powell, property partner at tax and advisory firm Blick Rothenbergs, agreed that the government has done not enough to support commercial property landlords.
She said landlords need to be given a fast track process to enforce payment by tenants of all outstanding rent and services charges from the end of the rent moratorium in October, with interest and any other financial penalties included in the lease for non-payment of rent.
“The government’s Code of Practice for commercial property relationships is advisory and has no teeth,” Powell said.
“Remarks from the government stating that where tenants can pay, they should pay is a great headline, but payment is completely unenforceable by landlords and the Chancellor has done nothing to help landlords get their rent.”