Government launches survey to assess impact of new commercial rent law

By James McAllister

- Last updated on GMT

Government launches survey to assess impact of new commercial rent law

Related tags Rent Coronavirus Legislation Government Rent arrears

The Government has launched an online survey to help understand 'the context and impact of a new commercial rent law, which came into effect last week.

The stakeholder survey, run by the Department for Business, Energy and Industrial Strategy, will be used to inform the ongoing monitoring and evaluation process of the Commercial Rent (Coronavirus) Act 2022, which received Royal Assent last week. 

Replacing the lease forfeiture moratorium, which prevented the repossession of commercial premises if businesses are unable to pay their rent during the pandemic and expired last week, the new bill means a legally binding arbitration process is now available for eligible commercial landlords and tenants who have not yet reached an agreement over rent debt​ accumulated during the Covid crisis. 

The law applies to commercial rent debts of businesses including pubs, gyms and restaurants 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 in scope.

"We want to make sure that the views of businesses potentially affected by policy are heard and taken into account," it reads on the survey webpage.

While the moratorium has ended, eligible firms remain protected for the next six months during which arbitration can be applied for or until the conclusion of an arbitration.

The Government says it encourages commercial landlords and tenants to negotiate their own agreement where possible, so that an arrangement to resolve debt is mutually agreed, instead of resorting to the arbitration process.

To that end, a new Code of Practise was published last year​ to provide commercial landlords and tenants with a clear process for settling outstanding debts.

“These are very welcome new laws for the hospitality industry: the Commercial Rent (Coronavirus) Bill is decisive Government legislation to deal with the £7bn-plus rent debt accrued during the pandemic by businesses across all sectors. And as our sector tries to recover, it’s imperative that rent debt is dealt with, otherwise it’ll hamstring our recovery,” says Kate Nicholls, chief executive of UKHospitality.

UKHospitality will be producing guidance for webinars on how tenants should approach the arbitration process, and will be urging arbitrators that they should be seeking to preserve businesses and jobs while also encouraging landlords to take a pragmatic approach to the arbitration process.

“We’re also encouraging affected businesses to complete the Department for Business, Energy and Industrial Strategy’s rent survey, which seeks to ensure that the views of businesses are ‘heard and taken into account’,” adds Nicholls.

The survey can be accessed here​.

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