The Department for Business, Energy and Industrial strategy has published a new commercial property Code of Practice that encourages landlords to waive ‘some or all’ coronavirus rent arrears where possible.
The Government has also published a draft Commercial Rent (Coronavirus) Bill that could require mandatory arbitration in cases where commercial rent disputes can’t be resolved.
The new Code of Practice replaces the ‘Code of Practice for commercial property relationships’ which was originally published on 19 June 2020 and updated in April 2021. It is designed to help commercial landlords and tenants resolve any remaining commercial rent disputes which arose during periods of forced closure in the pandemic.
This will apply in England and Wales and will be in addition to previous legislation that will prevent most evictions due to rent arrears before 25 March 2022.
These commercial tenants will also be protected from debt claims by landlords for pandemic rent arrears, including County Court Judgements and High Court Judgements.
Business secretary Kwasi Kwarteng said the measures would “provide commercial landlords and tenants with the clarity and certainty they need to plan ahead and recover from the pandemic.”
He also encouraged landlords and tenants to continue “working together to reach their own agreements ahead of the new laws coming into place,” and said: “we expect tenants capable of paying rent to do so.”
Tom Fox, Licensed Insolvency Practitioner at Umbrella Insolvency said: “This will be seen as a positive by many operators that haven’t been able to reach an agreement with their landlords. The government has introduced some protections for commercial renters, but there was always a question mark over what would happen in 2022.
“As always, the devil will be in the detail of these proposals, particularly when it comes to arbitration.”
If your business is struggling with rent arrears or another type of business debt, speak to a member of our team for advice today. Call: 0800 611 8888.