Commercial Rents (Coronavirus) Bill
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The Commercial Rents (Coronavirus) Bill of the Parliament of the United Kingdom aims to help commercial landlords and tenants in resolving rent arrears that have arisen as a result of the COVID-19 pandemic.[1][2][3]
Law is passed[edit]
The bill became law on 24 March 2022 [4] The copy of the Legislation can be read here [5]
Background[edit]
During the COVID-19 pandemic, many businesses were mandated to close in full or in part by Government.[6] At the same time, the government introduced an eviction moratorium and protection for thousands of commercial tenants. As a result, many businesses have accrued debts, estimated to be over £6bn as of March 2021, As the restrictions ended on 18 July 2021, and in an effort to protect a large number of businesses from eviction and reduce the number of jobs at risk of insolvency, regulatory intervention has been proposed for England and Wales. This was announced by Government on 16 June 2021 the intention is to ringfence unpaid rent that had built up when a business has had to remain closed during the pandemic.[7] Landlords are expected to make allowances for the ringfenced rent arrears and share the financial impact with their tenants. The rent from the closure periods is now defined as protected rent debt in the bill.
The bill was published on 9 November 2021 [8]
The bill introduces a mandatory code of practice for commercial landlords and tenants to follow [9]
The bill gives protection for those operating under a businesses tenancy from rent debt recovery, and if no agreement can be reached, that the matter can then be resolved by arbitration.
The arbitration award can alter the principle sum owed under a business tenancy and give business tenants time to pay (up to 24 months). The act also proposes to alter the Arbitration Act 1996 [10] under Schedule 1 of the bill.
New legal terms introduced[edit]
"Protected Rent Debt", which is defined as being (as well as rent) the interest, services, and insurance charged to a tenant that accrued during the relevant periods below.
"Relevant period", which is defined as being from 2.00pm on 21 March 2020 until 11.55pm on 18 July 2021 (ENGLAND only), 6.00am on 7 August (2021 WALES only)
"Adversely affected by Coronavirus", which is defined as, occurring during a "relevant period" and that any part of the business or the premises was subject to a closure requirement, it is not necessary for the whole building to have been closed.
The bill also outlines the period of time (6 months) in which either a Landlord or Tenant can make a reference to arbitration.
References[edit]
- ^ Waterfield, Simon (10 November 2021). "Government Introduces Commercial Rents (Coronavirus) Bill l Nelsons". Nelsons.
- ^ "Government publishes draft legislation for arbitration of pandemic rent arrears disputes in England". Pinsent Masons.
- ^ "New UK Rules Governing Unpaid Commercial Rent". The National Law Review.
- ^ "New law to resolve remaining COVID-19 commercial rent debts now in place".
- ^ "Commercial Rent (Coronavirus) Act 2022".
- ^ Baker, Carl; Kirk-Wade, Esme; Brown, Jennifer; Barber, Sarah (12 September 2021). "Coronavirus: A history of English lockdown laws" – via commonslibrary.parliament.uk.
{{cite journal}}: Cite journal requires|journal=(help) - ^ "Eviction protection extended for businesses most in need". GOV.UK.
- ^ "Commercial Rent (Coronavirus) Bill publications - Parliamentary Bills - UK Parliament". bills.parliament.uk.
- ^ "New measures in Bill to assist commercial landlords and tenants in resolving rent debts resulting from the COVID-19 pandemic". GOV.UK.
- ^ "Arbitration Act 1996".