A re-cap

As you are aware the Coronavirus Act 2020 was brought in at the beginning of the Covid-19 pandemic to protect business tenants by restricting landlords from exercising certain rent arrears recovery methods.

Subsequent to this, further protections for business tenants in England were introduced under the Commercial Rent (Coronavirus) Act 2022 which applied to ‘protected rent debts’ which accumulated whilst businesses were forced to close during lockdowns or were subject to restrictions. These debts were ringfenced by the 2022 Act, meaning no action could be taken by landlords to recover the debt for a 6-month period including by way of:

·         Court proceedings;

·         CRAR;

·         Forfeiture;

·         Drawing down on a rent deposit; and

·         Serving a statutory demand.

During this new moratorium, the government encouraged the parties to negotiate the ring-fenced arrears, and the government set up an arbitration scheme which both landlords and tenants could apply to in order to have the protected rent debts determined by an arbitrator. We have previously provided a seminar on the 2022 Act and the arbitration scheme and you can watch this seminar by following this link Click Here.

The position now

England

The moratorium period under the 2022 Act has now ended (it ended at midnight on 23 September 2022). Therefore:

·         if the arbitration process was not used, then any rent arrears accrued during the ‘protected period’ are no longer ring-fenced and all the usual enforcement options are now available to landlords to recover the debt.

·         if the arbitration process was used, then any arrears included in an agreement made under the process continue to be protected for the duration of that agreement. Any arrears that have accrued since, or which fall outside the agreement made, can be enforced in the usual ways.

Wales

Restrictions on forfeiture for non-payment of commercial rent in Wales ended at midnight on 24 September 2022 and forfeiture can be used in Wales again in the usual way.

Please contact Land Law LLP’s litigation team should you wish to discuss any particular aspect of this article or to enquire how we can help you with any commercial landlord and tenant queries you may have.