Government urged to help businesses pay rent

Ibec and Isme warn that commercial leaseholders must be protected from eviction

Grafton Street:  All but essential shops closed late in March when the Government stepped up measures to contain the spread of coronavirus. Photograph: Bryan O’ Brien

Grafton Street: All but essential shops closed late in March when the Government stepped up measures to contain the spread of coronavirus. Photograph: Bryan O’ Brien

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Employers want the Government to protect businesses facing the threat of eviction arising from difficulties paying rent as a result of the Covid-19 crisis.

Government has already told residential landlords not to raise rents or evict tenants while the coronavirus lockdown continues.

Groups such as employers’ body Ibec and the Irish Small and Medium-sized Enterprises (Isme) association are calling for the Government to extent similar measures to commercial tenants or to give them cash to aid them in paying rent.

Arnold Dillon, director of Retail Ireland, part of Ibec, warned on Monday that some commercial landlords had issued legal threats to tenants unable to pay rents, a move he called deeply regrettable.

“An agreed way forward is required,” Mr Dillon stressed. He added that the Government should protect commercial leaseholders from eviction as part of a wider effort to aid retailers during the crisis.

He argued that provisions allowing commercial landlords to end leases and evict tenants should be suspended to allow businesses get trading again once they reopen.

Mr Dillon said the alternative would drive companies out of business with massive job losses.

‘Arbitration process’

All but essential shops closed late last month when the Government stepped up measures to contain the spread of coronavirus.

Mr Dillon pointed out that many retailers were unable to pay rent. “Many tenants are working with landlords to find interim solutions, but a more systematic approach is required,” he said.

“A binding mandatory arbitration process to manage disputes over commercial leases is needed. This should include a significant facility for State burden-sharing and eviction protection.”

Neil McDonnell, Isme chief executive, argued that the Government should simply give cash to small businesses to allow them pay landlords.

“The Government needs to provide liquidity to small businesses to maintain payments including rents,” he said.

In a statement, Mr McDonnell warned on Monday that the Covid-19 crisis had starved thousands of Irish businesses of cash over the last two months.

“The vast majority of these are viable, profitable businesses, which have simply been prevented from trading,” he said.

Mr McDonnell emphasised that adding to these businesses’ debts was not a solution to their cash problems.

Access to examinership

He maintained that they needed grants to keep them afloat until trading could restart.

Mr McDonnell also pointed out that the UK and a number of EU jurisdictions were giving grants to small and medium-sized firms to help them through the crisis.

His organisation also wants to see businesses get easier access to examinership, which gives court protection to troubled companies that can show they have a reasonable prospect of survival.

Many businesses have used this system to negotiate lower rents with landlords as part of an overall rescue plan.

Earlier this month, Ibec called for new and emergency cashflow support from the Government for Irish business.

The business body calculated that its measures would provide about €26.4 billion in cash to the economy but would cost the State €5.9 billion.

Ibec director of policy and public affairs Fergal O’Brien said that if these measures were not implemented, the road to recovery would be longer and more expensive.