And private sector landlords are being asked to follow the government’s example to help firms that have been hard hit by the coronavirus outbreak and have struggled to pay their rents.
During the pandemic, the government offered all of its business tenants a rent deferral and now, under the new ‘Government as Landlord’ policy, more support for businesses will be considered in the shape of additional concessions, like waiving rent or offering lease breaks.
Under the new policy, the government has adopted the framework for renegotiating lease terms set out in its guidance for commercial landlords and tenants, which it is urging private sector firms to adopt.
Infrastructure Minister Kevin Lewis said the previous government policy of simply deferring rent for commercial tenants was ‘not always the best long-term solution’ and could compound debt that has built up for many struggling businesses.
‘Government’s new policy enables us to provide support which is based on a tenant’s individual circumstances,’ he said.
‘The deferred rent will remain repayable for the time being but, for tenants who demonstrate that they’re being severely affected by Covid-19 trading restrictions may be offered a partial or even complete rent waiver, and a revised tenancy agreement.
‘We want to help Jersey businesses to continue to trade, and charging less rent is preferable to losing a tenant and a Jersey company.’
He added that he would like to see private sector firms follow the government by offering rent holidays and lease breaks to help struggling firms, and government-backed agency Jersey Business would be able to assist in this process.
‘Jersey Business will provide free and confidential advice to businesses that need to renegotiate their rents or would like to review their financial position and cash flow,’ he said.
‘Tenants and landlords should consider their current and forecast cash flows, and act reasonably and transparently.
‘Tenants should think about what they can offer their landlords, while being aware that their landlords are also likely to have their own financial commitments.’
Guidance and templates for renegotiating tenancy agreements are available from Jersey Business, whose website is at jerseybusiness.je.
