Commercial Rent (Coronavirus) Bill and a new Code of Practice for Commercial Property Relationships

Lauren Casey, 18th November, 2021

Statutory arbitration process for pandemic-related commercial rent arrears introduced by Commercial Rent (Coronavirus) Bill.

On 9 November 2021, Parliament introduced the Commercial Rent (Coronavirus) Bill and a new Code of Practice for Commercial Property Relationships, following the COVID-19 Pandemic. The Bill relates only to commercial rent arrears accrued during the pandemic and will be available for commercial landlords and tenants in England and Wales who have not been successful in reaching an agreement on their own.

The new Code of Practice replaces the Code of Practice for Commercial Property Relationships During the COVID-19 Pandemic, which was published in June 2020 (updated in April 2021). It provides guidance for negotiations relating to rent arrears and also the statutory arbitration process itself.

Other remedies which are currently available to landlords will be suspended in order to give the statutory arbitration process precedence. Where debt claims have been commenced on or after 10 November 2021 but before the Bill is in force, if one party requests a stay of proceedings, this will be granted to enable parties to seek resolution through the statutory arbitration process. If judgment has already been obtained for a protected rent debt in that period, enforcement may be stayed, and the matter may still be subject to the statutory arbitration process.

Landlords will be unable to present:

  • Winding-up petitions for protected rent debt during the moratorium period for the statutory arbitration process to be utilised.

  • Bankruptcy petitions against individuals for protected rent debt where the statutory demand relied on was served (or, if an unsatisfied judgment is relied on, the claim was issued) on or after 10 November 2021.

Bankruptcy orders which are made on or after 10 November 2021, but before the Bill comes into force will be declared void.

Subject to parliamentary approval, the Government’s intention is to pass the Bill by 25 March 2022.

Need advice on any of the issues raised in this article?

Get in touch with the author, Lauren Casey,today on 01482 324252 or via email or contact any of her colleagues in our Property Litigation team.

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