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Gyms to face financial hardship as rent expectations return to normal

June 11, 2020

Thousands of gyms and leisure operators could find themselves forced out of business due to crippling costs to rent a gym, which come back into effect at the end of June, According to UKactive. The organisation is calling on the government to extend its protection for thousands of tenants who will be expected to pay the rent for the next quarter, despite remaining closed since 20th March.

With no customers able to use the facilities over the last 10 weeks, many businesses have had no choice but to furlough their staff to save costs. However, they are still faced with utility bills and delayed rent payments which they currently cannot afford due to no income.

A consultation between UKactive and the UK’s leading operators has revealed that many are facing major financial concerns if we see no change in the coming days.

Previously, the government announced it will launch a Code of Practice to project the high street during the coronavirus. UKactive is calling for protections on rent to form part of the measures if businesses are to survive the crisis.

In April, UKactive successfully lobbied the government to amend the Coronavirus Act to restrict tactics being adopted by landlords who were coercing gyms and leisure centres into paying rent that had been withheld as a result of the virus.

The measures announced by the Government included for statutory demands and winding up petitions to be voided for some time, while changes were made to the use of Commercial Rent Arrears Recovery.

Landlords and investors were also asked to collaborate with high street businesses who could not pay their bills during the pandemic. At the same time, the Government introduced new measures to protect the high street from aggressive debt recovery actions.

However, these protective measures will expire at the end of the month, meaning to rent a gym, leisure operators must pay large amounts of rent that they cannot afford. This will put many into administration as they are threatened with legal action through statutory demand noticed and winding up orders.

UKactive urges the Government to:

·         Extend the Insolvency Bill, with specific emphasis on the Moratorium of Forfeiture, until October 2020.

·         Scrap Stamp Duty Land Tax for extending leases during this period.

Huw Edwards, CEO of ukactive, said: “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.

“Our nation’s gyms and leisure facilities are ready to reopen safely when called upon, and to play a key part in restoring our communities’ health and wellbeing following lockdown.

“However, the Government must ensure that our members are able to open their doors with confidence and 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, which would be a tragic loss to communities across the UK.”

To keep up to date with the latest fitness trends and news surrounding gyms and Covid-19, read our blog or get in touch with Fit2Train today.

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