The government is introducing new laws and a Code of Practice to resolve commercial rent debts accrued because of the pandemic.

Commercial tenants are protected from eviction until 25 March 2022. It’s hoped this will provide time for landlords and tenants to negotiate how to share the cost of rent debts.

These negotiations will be underpinned by a new Code of Practice, which sets out that, in the first instance, tenants unable to pay in full should negotiate with their landlord in the expectation that the landlord waives some or all rent arrears where they are able to do so.

From 25 March 2022, new laws introduced in the Commercial Rent (Coronavirus) Bill will establish a legally binding arbitration process for commercial landlords and tenants who have not already reached an agreement, following the principles in the Code of Practice.

The Bill will apply to commercial rent debts related to the mandated closure of certain businesses such as pubs, gyms and restaurants during the pandemic. Debts accrued at other times will not be included.

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

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.

Please contact us if you would like more information about the issues raised in this article or any aspect of commercial property law.