There is an estimated £6 billion in unpaid commercial rent arrears accrued since March 2020. Although tenants have remained liable to comply with their lease covenants and rent obligations throughout the pandemic, many businesses have been unable to trade or pay their rent, and the usual tools for landlords to enforce these obligations have been temporarily removed.
The Government’s ban on landlords’ ability to evict commercial tenants for non-payment of rent, imposed on 26 March 2020 has been extended for a fifth time until 25 March 2022. Similarly, the Government’s bar on landlords using the Commercial Rent Arrears Recovery (CRAR) process, except in limited cases, will remain in place until 25 March 2022. Until these restrictions come to an end, the Government expects landlords and tenants to try and avoid disputes and litigation, caused by the effects of lockdown, by adopting the voluntary Code of Practice.
For those tenants who have accrued rent arrears during periods of lockdown since March 2020, the so-called ‘ringfenced period’, the Government plans to introduce into statute a mandatory binding arbitration to resolve Covid related rent arrears disputes.
Although the restrictions of the pandemic are slowly lifting, the aftermath will continue to be felt for some time.”
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