The Government announced yesterday (9 November) that it is introducing new laws and a revised Code of Practice to deal with the remaining commercial rent debts accrued because of the pandemic.
As before, this encourages tenants who can pay their rent to pay their rent in full. However, tenants who cannot afford to pay their rents in full are to negotiate with their landlord for arrears to be waived or postponed, where the landlord is able to do so. The revised Code also explains how the new arbitration system will work and the principles to be applied.
The Code applies to all rent arrears that have built up as a result of the impact of the pandemic, even for businesses that were not legally ordered to shut their premises. It is therefore wider than the new legislation published, which is summarised below.
- New legislation introduces a legally binding arbitration process from March 2022
- Will cover rents that accrued while businesses were legally forced to close during the pandemic
- Revised Code of Practice:
- where affordable, tenants should pay rent in full;
- landlords should make appropriate concessions to preserve viability of tenant’s business, but not at the cost of landlord’s solvency.
- Effective ban on court proceedings for rent arrears from 10 November 2021
- Ban on forfeiture based on rent arrears continues until March 2022.
The British Property Federation reports that rent arrear agreements have been reached between landlords and tennats in more than 80% of cases so far. Hopefully the balance will be able to do so without resorting to arbitration.
Photo by Jan Gottweiss on Unsplash
