Via Yahoo Finance

Gyms and leisure centres warn that they face eviction over the non-payment of rent during the coronavirus pandemic.

Exercise venues are struggling to pay their rents and overhead fees, with incomes drying up after having been forced to close by the government as part of the UK lockdown to help prevent the spread of coronavirus.

The industry’s trade body UKActive has called for urgent action to protect gyms as some landlords are using a loophole in the law to threaten eviction.

New rules banning the forfeiture of commercial leases until at least 30 June — and longer if the government finds it necessary — for non-payment of rent in order to protect commercial tenants were introduced last month.

However, the new law still allows landlords to take certain actions, including Commercial Rent Arrears Recovery (CRAR) which allows landlords of commercial premises to recover rent arrears by taking control of the tenant’s goods and selling them.

Landlords are also able to make debt claims, issue a statutory demand, or begin the liquidation of a company.

Businesses with no income could find themselves powerless against such legal actions as the new rules do not prevent landlords from forcing tenants to pay rent withheld because of lockdown closures.

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“A worrying number have decided to pursue statutory demand notices or winding up orders,” said Huw Edwards, chief executive of UKActive.

“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.”

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UKActive said it has evidence that many landlords are planning to bring legal proceedings against gyms and leisure centres.

The trade body said it expects the first cases to start this week and warned that pubs, restaurants, cafes, cinemas, and retailers who have also been forced to close due to the coronavirus pandemic could be threatened with similar legal action.

“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,” said Edwards.

“Our nation’s gyms and leisure centres form the fabric of our society, as well as contributing £7.7bn ($9.7bn) to the economy annually and employing one of the most passionate and dedicated workforces in the world.

“If nothing is done and we say goodbye to our gyms and leisure centres it will have a devastating impact on our society when we emerge from the coronavirus pandemic, at the precise time when these facilities will be needed desperately by people.”

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Humphrey Cobbold, chief executive of gym chain PureGym, told the BBC: “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.”

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