Dealing with commercial rent arrears as Covid-19 arbitration scheme closes

{mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0cm; line-height:107%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri",sans-serif; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi; mso-fareast-language:EN-US;}

 

The ability to refer to arbitration is no longer available to commercial landlords trying to recover rent arrears accrued during the coronavirus pandemic.

Associate solicitor Eleanor Longworth from Woodcocks Haworth and Nuttall Solicitors’ commercial property team, explains what the change means for commercial landlords and tenants, and how landlords should best deal with the recovery of such protected debt.

The moratorium period

The Commercial Rent (Coronavirus) Act 2022 came into force on March 25, 2022, bringing into law an arbitration process to protect businesses forced to close during the pandemic and unable to meet rental payments during that time.

Landlords were prevented from taking steps to recover unpaid rent that had accrued during periods of mandated closures, unless the landlord and tenant had already reached an agreement.

The act introduced a moratorium period, during which enforcement remedies would be suspended for the protected debt and a landlord or tenant could refer the debt to an arbitrator to determine what should be paid.

Arbitration

Under the act a case could be referred to arbitration within six months, meaning that the referral deadline for new arbitration cases was September 23, 2022. It has expired and to date the Secretary of State has not extended the referral window.

For those cases that have already been referred to arbitration, the moratorium will remain in force. The parties should await the arbitrator’s award, which will be binding. An award can only be challenged on limited grounds.

Recovering debt

Landlords now have the full suite of debt recovery remedies available to them for commercial property rent arrears.

For cases that have not already been to arbitration, landlords are now able to consider the following remedies for all debt, including any previously protected rent debt:

Issuing court proceedings to recover the debt Enforce monetary judgments obtained prior to the act coming into force Draw down on a rent deposit and then request a top-up by tenant, under a Rent Deposit Deed Petition for the winding up of a tenant company Serve a statutory demand or present a bankruptcy petition against a tenant that is an individual Exercise commercial rent arrears recovery Forfeit the lease and re-take possession of the premises

The benefits of any of these remedies will depend on the individual circumstances of each case. WHN Solicitors has a team of expert commercial property advisors who can advise in relation to each and put a strategy in place to help you – whether landlord or tenant – achieve your objective.

For more information contact Eleanor Longworth on 0161 761 4611 or by email via [email protected]  

Enjoyed this? Read more from Woodcocks Haworth & Nuttall Solicitors

Latest news

1

Barnfield Construction transitions to an Employee-Owned Business Staff Cheer Photo.jpg.jpg

Barnfield Construction transitions to an Employee-Owned Business

24 Jan 2025

2

Wallsauce looks to grow B2B customer base with increased trade focus Martin Emmott Rosebud and Andy Gerraty Wallsauce

Wallsauce looks to grow B2B customer base with increased trade focus

24 Jan 2025

3

CBP goes into administration Community and Business Partners in Blackburn with doors shut

CBP goes into administration

23 Jan 2025

4

Plan moves forward for new £13.2m Innovation Hub Councillor Phillippa Williamson and Coun Aidy Riggott

Plan moves forward for new £13.2m Innovation Hub

22 Jan 2025

5

Record turnover as Napthens continues to grow Stephen Faulkner

Record turnover as Napthens continues to grow

22 Jan 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
The Lancashire Festival of Business
FOB 315
Exhibitions
30 Jan 2025

The Lancashire Festival of Business

Impact Conferencing, Burnley, BB12 6QP

09:30 - 16:00

Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

North West Holiday Home Show
PLG - NWHHS - Social - Jan 2024.jpg.jpg
LBV Hub Exhibitions
18 Jan 2025 - 26 Jan 2025

North West Holiday Home Show

South Lakeland House Showground, Yealand Redmayne, LA5 9RN

09:00 - 14:58

The Marketing Meetup IRL: Lancashire
LBV Hub Event Image.png.png
LBV Hub Networking
30 Jan 2025 - 30 Jan 2025

The Marketing Meetup IRL: Lancashire

Strawberry Fields Digital Hub, Chorley, PR7 1PS

18:00 - 20:00

Police Apprenticeship event
Student Centre Autumn 2022.jpg.jpg
LBV Hub Social
12 Feb 2025 - 12 Jan 2025

Police Apprenticeship event

University of Central Lancashire, Foster Social Space , Preston , PR1 2HE

16:00 - 19:00

February Preston Tech Connection Meet-Up: Tech & Our Planet
PRESTON TECH CONNECTION jan.ai.png.png
LBV Hub Networking
12 Feb 2025 - 12 Feb 2025

February Preston Tech Connection Meet-Up: Tech & Our Planet

Society1 Coworking Space, Preston, PR1 3LT

18:00 - 19:30

The Business Network Central & East Lancashire
LBV Hub Networking
13 Feb 2025 - 13 Feb 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Sub36 Networking - Behind the beans
Sub36 Social1200Atkinsons New
Networking
14 Feb 2025

Sub36 Networking - Behind the beans

Atkinsons Speciality Coffee, Lancaster, LA1 1 EX

09:00 - 11:30

Red Rose Awards 2025
Red Rose Awards 2025
Awards
13 Mar 2025

Red Rose Awards 2025

Winter Gardens Blackpool

18:00 - 11:59

Lancashire Business Day 2025
241122lbvlancashiredaylhp0647web
Networking
27 Nov 2025

Lancashire Business Day 2025

12:00 - 17:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV120 Online Graphic 1
Subscribe now

Weekly news bulletin