Vol 19 (2022) - Issue 1

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The Commercial Rent (Coronavirus) Bill: Resolving Remaining COVID-19 Commercial Rent Debts?

Synopsis
The Government announced the highly-anticipated draft Commercial Rent (Coronavirus) Bill (the 'Bill') and revised Code of Practice on 9 November 2021. It is expected that the Bill will come into force from March 2022, but it may impact relevant claims from 10 November 2021.
The Government’s intention is that, where possible, rent debt accrued as a result of forced closures during the pandemic should not force an otherwise viable business to cease operating. It aims to ensure that contractual commitments be recognised as far as possible while achieving a proportionate balance between the interests of the landlords and tenants. To provide the time to introduce and pass legislation, certain temporary restrictions such as the moratorium on forfeiture and restrictions on the use of the Commercial Rent Arrears Recovery regime will remain in place until March 2022, when new measures preventing a circumvention of the new regime are introduced.
Although the Bill seeks to introduce binding arbitration procedures where agreement on the payment of such rent arrears has not already been reached, the details are vague and there are issues to be ironed out.
In its current form it may therefore be most useful in incentivising tenants with outstanding debts and their landlords to negotiate a consensual outcome.