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Commercial Rent (Coronavirus) Bill and Code of Practice for commercial property relationships following the Covid-19 pandemic

  • United Kingdom
  • Litigation and dispute management
  • Real estate
  • Real estate dispute resolution

18-11-2021

On 9 November 2021 the Government issued a press release entitled “New laws and code to resolve remaining COVID-19 commercial rent debts” which offers more information on its proposed scheme to address disputes in relation to commercial rent arrears accrued during the pandemic (Lawbite on the press release can be found here).  Later that same day the Commercial Rent (Coronavirus) Bill (the “Bill”) became available and had its first reading in the Houses of Parliament.  Also released was the new Code of Practice for commercial property relationships following the COVID-19 pandemic (the “New Code”) which replaces the Code of practice for commercial property relationships originally introduced in June 2020 (the “2020 Code”).

There are, already in place, restrictions on the landlord’s ability to take certain enforcement action in relation to leases - in particular, there is a forfeiture moratorium in place and restrictions on contesting a new tenancy under Ground (b) of s.30(1) of the Landlord and Tenant Act 1954 until 25 March 2022, restrictions on enforcement by the exercise of CRAR also until 25 March 2022 and restrictions on presenting winding-up petitions in relation to rent arrears until 31 March 2022. Landlords are also restricted from relying on Ground (b) when contesting the grant of a new tenancy under Part II of the Landlord and Tenant Act 1954, in that a landlord cannot rely on non-payment of pandemic related arrears when seeking to make out an opposition to a new tenancy on that ground.  These restrictions are intended to offer tenants some breathing space to negotiate with their landlords a resolution of disputes surrounding their arrears. 

This note seeks to set out the main provisions of the Bill and highlights a few practical points arising from them. At the time of writing the Bill is awaiting its second reading and has some distance to travel before it is in final form and passed. The Bill is expected to be passed by the end of March 2022 subject to parliamentary approval.

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