A new law is now in place to help resolve certain remaining commercial rent debts accrued due to the pandemic. On 24th March, Business Minister Paul Scully announced that the Commercial Rent (Coronavirus) Bill 2022 had received Royal Assent in England and Wales. This provision will enable relief from certain rent debts for those businesses (such as pubs, gyms and restaurants) adversely impacted by COVID-19 due to mandated closures, either in part or in full, from March 2020 until the date restrictions ended for their sector. The law aims to resolve disputes and to help the market return to normal as quickly as possible.
The new law will provide a legally binding arbitration process to resolve certain outstanding, pandemic related, commercial rent debts. Commercial landlords and tenants are encouraged to negotiate agreements using the updated Code of Practice which provides them with a clear process for settling outstanding debts. However, if they are unable to reach an agreement, the new arbitration system can be used as a last resort for eligible business, replacing previous general moratorium on commercial evictions.
The previous moratorium, which provided firms with space to negotiate how to address the cost of commercial rent debts, ended on 24th March. However, eligible firms remain protected for the next 6 months during which arbitration can be applied for or until the conclusion of an arbitration.
For those who fail to reach an agreement, either party can apply for arbitration unilaterally. They are then free to continue negotiations outside of the legal arbitration process.
NCASS has welcomed the Bill, NCASS Director Mark Laurie commented ‘this is a necessary step to bring landlords to the table after businesses have built up significant debts, we hope that this will help our members who are struggling to come to a resolution with their landlords’
You can find more information about the Bill here.
You can read a copy of the Bill here.