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Lawbite: Commercial Rent (Coronavirus) Act 2022, Statutory Guidance to Arbitrators and Code of Practice for commercial property relationships following the Covid-19 pandemic

  • United Kingdom
  • Real estate
  • Real estate dispute resolution
  • Real estate litigation - LawBite

31-03-2022

Background:

Last year the Government promised to have in place, by 25 March 2022, new legislation establishing a mechanism for the resolution of certain rent arrears incurred as a result of the covid pandemic. The Commercial Rent (Coronavirus) Act 2022 (the “Act”) was passed on 24 March 2022. This note seeks to set out the main provisions of the Act and highlights practical points arising from them.

What is the Commercial Rent (Coronavirus) Act?

An Act which provides that disputes in relation to certain commercial rent arrears accrued during the pandemic should, in the absence of the parties reaching a negotiated settlement, be referred to an arbitrator who will resolve the matter.

The Act also establishes a Moratorium Period from 24 March 2022 until the last date a reference could be made to an arbitrator or the conclusion of any arbitration (see s23 of the Act).  The Moratorium Period offers the tenant breathing space whilst the arbitration process is ongoing or open to being used for the resolution of the dispute, as it restricts the landlord from taking a number of enforcement steps against the tenant for the “protected rent debt”.  These include forfeiture, exercising CRAR, using a tenant deposit, initiating certain insolvency arrangements, petitioning for bankruptcy orders or initiating arbitration proceedings (see s23-27 of the Act).

Further information can be found in our guide. Download it here.