Commercial Rent (Coronavirus Act) Coming to an End

Posted by Strettons on 6th September 2022 -

The final stage in the process set out by the Commercial Rent (Coronavirus) Act 2022 will reach its conclusion over the coming weeks. The Act, placing restrictions on commercial landlords' ability to appoint bailiffs and forfeit leases for rental monies overdue, has been effective since March 2020, when the commercial sector was forced to shut its doors because of Covid-19. This moratorium on landlord action on arrears continued until March this year. 
 
Since March 2022, a "binding arbitration" scheme has been introduced in England and Wales. Under the Scheme, tenants have been able to make applications for arbitration on rent outstanding from the Covid period. Rent from this period has remained ringfenced. A landlord or tenant can make a referral to the arbitration scheme in respect of protected rent up until 23 September 2022. However, any applicant wanting to progress must have formally notified their intention to arbitrate by 26 August 2022. This is as the pre-arbitration phase, a mandatory part of the process, can take up to 28 days to complete. The deadline to apply has therefore passed. 
 
On this basis, landlords and their tenants can look ahead to the next few weeks with far greater certainty - assuming no further extensions by the Government. The end of the moratorium helps redress the balance of the landlord/tenant relationship and is, in our view, a case of 'back to normal'. 

Such action on long term arrears needs careful planning. Has the tenant continued to pay aside from disputed arrears? Will the ability to enforce be a welcome opportunity to re-let or perhaps develop? We would be happy to hear from landlords to discuss and carefully plan the next steps, and we suggest the time to do so is now.