09 Nov 2021

On 9th November 2021 the Department for Business, Energy and Industrial Strategy announced that they will be introducing the Commercial Rents (Coronavirus) Bill, to resolve the remaining commercial rent debts accrued due to the pandemic.

Alongside this, the Department for Levelling Up, Housing and Communities will publish an updated Code of Practice for commercial landlords and tenants.

To align with the legislation, from the 9th November 2021 the Government is also protecting commercial tenants from debt claims, including County Court Judgements (CCJs), High Court Judgements (HCJs) and bankruptcy petitions, issued against them in relation to rent arrears accrued during the pandemic.

Commercial tenants will continue to be protected from eviction by the Government’s moratorium, which was extended to 25 March 2022, unless legislation is passed ahead of this. This provides time for landlords and tenants to negotiate over outstanding arrears that have built up during the pandemic.

Following Royal Assent of the Commercial Rent (Coronavirus) Bill, the new laws will come into force in England and Wales. Northern Ireland will have a power in the Bill to introduce similar legislation.

These laws apply to commercial rent debts accrued by businesses that were mandated to close, either in full or in part, from March 2020 until the date restrictions were lifted for their sector. Debts accrued at other times will not be in scope.

For those businesses in scope, legislation establishes a legally binding arbitration process for commercial landlords and tenants who have not already reached an agreement. The arbitration process will follow the principles set out in the revised Code of Practice.

The result of the arbitration process will be a legally binding agreement that the landlord and tenant must adhere to, resolving rent disputes and helping the market return to normal as quickly as possible.

More details can be found here in the Government's press release here. The Code of Practice is not yet live online on BEIS gov.uk pages, but I will share as soon as it is added.

If you have any follow up questions you can ask these directly by emailing [email protected].

 

Tags

News Article Coronavirus / COVID-19 Regulation

Author

Paul Richards

Paul Richards

CEO, AREF

Paul is the CEO of AREF.  Before joining AREF in 2020, Paul was Head of the European Real Estate Boutique within Mercer’s investment consulting business for almost 10 years, previously he was Head of Indirect Real Estate Investment and Global Managed Accounts at LaSalle Investment Management, where he was responsible for managing global portfolios of unlisted real estate funds for clients from Europe and Asia Pacific.

He has over 25 years of real estate experience in investment, corporate finance and research, and has advised investors, occupiers and venture capital companies on property portfolio strategy and on financial structuring, including PFI, senior and mezzanine debt and joint venture arrangements. His employers have included LaSalle Investment Management, Cushman & Wakefield and Henderson Investors.

Before coming into the world of real estate, Paul worked in marketing and market research. He originally studied Physiological Sciences at Lincoln College, Oxford and has a Master of Science in Real Estate from City University Business School, London, now Cass Business School.

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