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Hot Topic Highlight – Covid Rent Arrears Recovery

Updated: Oct 29, 2023

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What is today's blog about?

In this week’s blog, we take a look at the prospects for landlords recovering commercial rent arrears by forfeiture or the use of Commercial Rent Arrears Recovery (CRAR).

This is essential reading for RICS APC and AssocRICS candidates pursuing Landlord & Tenant or Property Management as a technical competency.

What has recently happened?

On 25 March 2022, the restrictions introduced by Section 82 Coronavirus Act 2020 and amendments to the Taking Control of Goods Regulations 2013 ceased.

The Government consulted and announced earlier this year that it will introduce binding Arbitration for some ringfenced arrears resulting from tenants impacted by Covid 19 compulsory business closures during lockdown periods.

The Commercial Rent (Coronavirus) Act 2022 has created new Arbitration laws relating to remaining commercial rent arrears which will operate in conjunction with a new Code of Practice for Commercial Property Relationships following the COVID-19 pandemic (effective from 9 November 2021) to guide commercial landlords and tenants in their negotiations.

What does the new Government guidance say?

  • Tenants should pay rent and arrears if they are able

  • Landlords should waive some or all rent arrears where they are able

  • Negotiations should be held between the parties

  • Parties will be encouraged to find means of dispute resolution before Arbitration

  • Binding Arbitration will not be compulsory

  • Either party may refer the dispute to Arbitration

  • There will be a 6 month window for an application for Arbitration to be made

  • There will be a maximum 24 month period to pay arrears in an Award

When and how will this come into force?

  • The Act came into effect on 25 March 2022

  • It applies in England & Wales

  • The new Code of Practice applies throughout the UK

How can we help?

Stay tuned for our next blog post to help build a better you.

N.b. Nothing in this article constitutes legal, professional or financial advice.


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