08 Jun 2020
Going bust: thousands of UK gyms face 'rent timebomb' at the end of June – ukactive calls for government protection
BY Tom Walker
Thousands of UK gyms could go out of business if they're forced to pay full rent payments, which are due at the end of this month.
In April, industry body ukactive successfully lobbied the government to amend the Coronavirus Act to restrict tactics being adopted by landlords who were insisting gyms and leisure centres pay rent that had been withheld as a result of COVID-19. However, these protective measures expire at the end of June.
This means gym operators will be liable for rent payments they potentially cannot afford – forcing many into administration as they're threatened with legal action through statutory demand notices and winding-up orders.
ukactive is calling on the government to extend its protection for thousands of tenants who will be asked to pay the rent for the next quarter on 24 June.
A consultation, involving the UK’s leading fitness operators, revealed that many are facing financial meltdown if nothing changes in the coming days.
“We're all looking forward to the day when we can reopen our clubs and start trading, but the government must recognise that as a sector we have been, and will be closed, for longer than almost every other sector – with zero income," said Martin Long, CEO of DW Fitness First – one of the UK's largest gym operators.
“For the sector’s survival, extended protection from imminent rent demands at the end of June is a pre-requisite to allow the industry time to reopen and to rebuild.”
Huw Edwards, CEO of ukactive, said the government should support the sector by extending the Insolvency Bill – with specific emphasis on the Moratorium of Forfeiture – until the end of Q3 (October 2020) and scrap Stamp Duty Land Tax for extending leases during this period.
“Thousands of gyms and leisure facilities are facing a ticking time bomb with rent payments approaching fast, despite the fact they have been closed for more than 10 weeks," Edwards said.
"The Government must ensure that our members are able to open their doors with confidence and be unafraid of the imminent threat from landlords as they get back on their feet.
“We need urgent action to provide further protection for gyms and leisure facilities so that they are not forced to close permanently due to unaffordable rent payments. This would be a tragic loss to communities across the UK.”
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