Government Extends Eviction Protections for Restaurants to End of 2020

The government has announced that it will extend its lease forfeiture moratorium until the end of 2020. The coronavirus eviction protections, initially set to run out at the end of September, do not prevent landlords from charging restaurants rent for the time they are protected, but they do buy them time, and the opportunity to negotiate deals.

Restaurants had been fearing that 30 September would bring a slew of repossessions, with the next quarterly rent payment theoretically due on 29 September. Now, they are protected from paying that rent.

Industry body U.K. Hospitality joined many restaurants in feeling that, while a welcome announcement, further support — on both rent and staff costs, which are restaurants’ two biggest outgoings — is necessary. “This is a welcome step forward and should give businesses some much-needed breathing room to come to agreements. This alone, however, is not going to solve the crisis.

“It’s critical that the Government also extends the moratorium on statutory demands and winding-up petitions and include County Court Judgments. This should be extended until the end of March 2021 to give maximum opportunity to find solutions.”

This buys restaurants negotiation time, not money, and its positive impact is predicated on an economic recovery — in simple terms, more people going to restaurants, more often — and on productive negotiations in the time bought. Both of those are far from certain. The negative corollary to this is that it simply kicks the can down the road, and January 2021 would bring the restaurant “bloodbath” that U.K. Hospitality predicts.

More soon on restaurants’ reaction to the extension.