UK gyms and leisure centers owners are saying that they face being evicted or sued over non-payment of rent amidst the coronavirus pandemic.
UKActive, a trade organization representing gyms and leisure centers, is calling for immediate action from the UK government to protect these businesses from threats of being evicted or sued by landlords due to non-payment of rent during the coronavirus crisis.
While new rules were introduced last month to protect commercial tenants, they do not prevent landlords from taking steps to force tenants to pay rent withheld due to the lockdown.
UKActive chief executive Huw Edwards said: "A worrying number have decided to pursue statutory demand notices or winding up orders. We need the government to act now to direct...that landlords cannot do this."
"With 2,800 gyms at risk of permanent closure, and 100,000 jobs at stake, time is of the essence," Edwards added.
On March 25, Section 82 of the government's Coronavirus Act 2020 was enacted as a measure to provide protection to commercial tenants in the country. Under this section, forfeiture of commercial leases for non-payment of rent is banned until June 30, 2020.
This may be extended if the government deems it necessary.
However, the Act does not prevent landlords from taking certain actions, such as making a debt claim, issuing a statutory demand, initiating the Commercial Rent Arrears Recovery (CRAR), or commencing winding-up proceedings.
These initiatives could potentially lead to closure of businesses with no income.
According to UKActive, it has evidence showing an increasing number of cases where landlords are planning to instigate legal proceedings against gym operators.
The trade body expects these cases to begin this week and that restaurants, cafes, cinemas, and retailers could be the next ones to be affected.
Edwards said: "Many of our members are faced with the harsh reality of no revenues for a long period, so must take steps to preserve cash, including not paying their rent for the quarter ahead."
He mentioned that while some landlords were willing to participate in constructive discussions to reduce the pressure on tenants, several of them have chosen to proceed with statutory demand notices or winding up orders.
What gym operators experience
According to David Lloyd Leisure, owner of David Lloyd Clubs, it tried to approach one landlord to request a waiver of rental payments due on March 25, 2020 until the crisis eases and its clubs are allowed to reopen.
However, the landlord immediately rejected the request and threatened to initiate legal action through the issuing of a statutory notice.
Glenn Earlam, chief executive of David Lloyd, said: "This situation is unfortunately entirely outside of our control. We want to work together with landlords to ensure we can survive this pandemic and emerge with businesses able to continue to pay rent and other costs in the future."
Meanwhile, PureGym has been experiencing the same thing at its facilities.
PureGym chief Humphrey Cobbold argued: "The burden of dealing with the economic impact of the Covid-19 pandemic continues to fall on commercial tenants rather than being shared equitably by landlords as well."
"Time is of the absolute essence, given that proceedings such as statutory demands and winding up orders threaten to force companies into insolvency within days of being issued," Cobbold added.
