New law to help resolve some outstanding coronavirus rent debt

A new law has come into force in England and Wales to help resolve some outstanding commercial rent debts accrued during the pandemic.

From today (24 March) a legally binding arbitration process will be available for eligible tenants and commercial landlords who have not already reached an agreement.

A government announcement said this would “resolve disputes” and “help the market return to normal as quickly as possible”.

It comes as the rent moratorium protecting commercial tenants from eviction for not paying rent is due to end on 25 March. This had prompted fears a raft of hospitality venues could be forced to close.

Eligible firms remain protected for the next six months during which arbitration can be applied for or until the conclusion of an arbitration.

The new law applies to businesses including restaurants, pubs and gyms which were mandated to close, in full or in part, from March 2020 until the date restrictions ended for their sector. Debts accrued at other times will not be subject to the law.

Business minister, Paul Scully, said: “This new law will give commercial tenants and landlords the ability to draw a line under the uncertainty caused by the pandemic so they can plan ahead and return to normality.

“Landlords and tenants should keep working together to reach their own agreements where possible using our Code of Practice to help them, and we’ve made arbitration available as a last resort.

“Tenants who can repay their rent debts in full, should do so, and when they cannot, landlords should try to share the burden, so we can all move on.”

The government's Code of Practice was published last year to provide landlords and tenants guidance on the process for settling outstanding debts.