Rent Arrears Covid-19

Rent Arrears Covid-19

This is a smaller article for the month that will go alongside our usual monthly article. Jon Reakes wrote this article, concerning a new rent arrears bill.

The government introduced the Commercial Rent (Coronavirus) Bill in November 2021. The Bill sets out a framework for legally binding arbitration. It gives power to an Arbitrator to write off, in whole or in part, pandemic related rent arrears and/or allow tenants time to pay. It also provides details for continued restrictions. These are in relation to forfeiture and winding up petitions, debt claims and rent deposits for pandemic related debts. 

The rent arrears Bill in effect provides a framework where debt related to closures between 21 March 2020 and re-opening can be ringfenced and dealt with by way of a third-party independent arbitrator. The Bill is currently about to go in front of the House of Lords for the third reading. We expect it to be passed on the 21st of March 2022 and come into effect on the 25th of March 2022. 

The Bill sets out a precise “pre-arbitration process” that must be followed. With a specific timetable to be followed. The first principles of the arbitrator aim at preserving (or restoring) the viability of the business of the tenant. However, this must be consistent with preserving the landlord’s solvency. 

Remedies available to the tenant are: 

  • Writing off the whole debt or part of the debt 
  • Giving time to pay, including payment by instalments (must be within 24 months of the award 
  • Reducing (including to zero) any interest that would be payable by the tenant. Either in relation to whole or part of the debt 

This is a complicated process and tenants will most likely need support, if you have any queries at all please get in touch. 

For more articles like this, go to our Articles page (or click here for our previous article) and also consider signing up to our Newsletter! We also have several other articles concerning rent for landlords and tenants such as; Market Rent Only, Negotiating commercial rent, Settling a rent review and Negotiating terms in COVID-19.


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Posted on by JS Reakes

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