Commercial Rent (Coronavirus) Act 2022
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| Act of Parliament | |
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| Long title | An Act to make provision enabling relief from payment of certain rent debts under business tenancies adversely affected by coronavirus to be available through arbitration; and for connected purposes. |
|---|---|
| Introduced by | Paul Scully (Commons) Lord Grimstone of Boscobel (Lords) |
| Dates | |
| Royal assent | 24 March 2022 |
| Other legislation | |
| Amends | Arbitration Act 1996 |
Status: Current legislation | |
The Commercial Rent (Coronavirus) Act 2022 of the Parliament of the United Kingdom aims to help commercial landlords and tenants in resolving rent arrears that have arisen as a result of the COVID-19 pandemic.[1][2][3]
Background
[edit]During the COVID-19 pandemic, many businesses were mandated to close in full or in part by Government.[4] At the same time, the government introduced an eviction moratorium and protection for thousands of commercial tenants.[5] As a result, many businesses accrued debts: 33% of SMEs held debt levels of more than 10 times their cash balances, versus 14 per cent before Covid-19 hit.[6] As the restrictions ended on 18 July 2021,[7] and in an effort to protect a large number of businesses from eviction and reduce the number of jobs at risk of insolvency, regulatory intervention was proposed for England and Wales.[8] This was announced by Government on 16 June 2021 the intention is to ringfence unpaid rent that had built up when a business has had to remain closed during the pandemic.[9] Landlords were expected to make allowances for the ringfenced rent arrears and share the financial impact with their tenants. The rent from the closure periods is now defined as protected rent debt in the bill.
The Act introduces a mandatory code of practice for commercial landlords and tenants to follow.[10] The Act gives protection for those operating under a businesses tenancy from rent debt recovery, and if no agreement can be reached, that the matter can then be resolved by arbitration.
The arbitration award can alter the principle sum owed under a business tenancy and give business tenants time to pay (up to 24 months). The Act also amends the Arbitration Act 1996 under Schedule 1.[11]
Provisions
[edit]The Act also outlines the period of time (6 months) in which either a landlord or tenant can make a referral to arbitration.
New legal terms introduced
[edit]- "Protected Rent Debt", is defined as being the rent, the interest, services, and insurance charged to a tenant that accrued during the relevant periods.
- "Relevant period" is defined as being from 2.00pm on 21 March 2020 until 11.55pm on 18 July 2021 (England), 6.00am on 7 August 2021 (Wales).
- "Adversely affected by Coronavirus", which is defined as, occurring during a "relevant period" and that any part of the business or the premises was subject to a closure requirement, it is not necessary for the whole building to have been closed.
Law is passed
[edit]The bill was introduced on 9 November 2021.[12] The bill became law on 24 March 2022.[13]
References
[edit]- ^ Waterfield, Simon (10 November 2021). "Government Introduces Commercial Rents (Coronavirus) Bill l Nelsons". Nelsons.
- ^ "Government publishes draft legislation for arbitration of pandemic rent arrears disputes in England". Pinsent Masons.
- ^ "New UK Rules Governing Unpaid Commercial Rent". The National Law Review.
- ^ Baker, Carl; Kirk-Wade, Esme; Brown, Jennifer; Barber, Sarah (12 September 2021). "Coronavirus: A history of English lockdown laws". House of Commons Research Briefings – via commonslibrary.parliament.uk.
- ^ "Eviction ban on firms behind on rent is extended by nine months". BBC News. British Broadcasting Corporation. 16 June 2021. Archived from the original on 16 June 2021. Retrieved 5 October 2024.
- ^ Noonan, Laura (8 October 2021). "A third of UK small businesses highly indebted, says Bank of England". Financial Times. Archived from the original on 8 October 2021. Retrieved 5 October 2024.
- ^ Morton, Becky (12 July 2021). "Covid: England lockdown rules to end on 19 July, PM confirms". BBC News. British Broadcasting Corporation. Archived from the original on 12 July 2021. Retrieved 4 October 2024.
- ^ Alonzi, Riccardo (4 March 2024). "Covid reforms could help struggling firms stave off insolvency - Riccardo Alonzi". The Scotsman. National World Publishing Ltd. Archived from the original on 4 March 2024. Retrieved 5 October 2024.
- ^ "Eviction protection extended for businesses most in need" (Press release). UK Government. 16 June 2021. Archived from the original on 17 June 2021. Retrieved 5 October 2024.
- ^ "New measures in Bill to assist commercial landlords and tenants in resolving rent debts resulting from the COVID-19 pandemic". GOV.UK.
- ^ "Arbitration Act 1996", legislation.gov.uk, The National Archives, 1996 c. 23
- ^ "Commercial Rent (Coronavirus) Bill publications - Parliamentary Bills - UK Parliament". bills.parliament.uk.
- ^ "New law to resolve remaining COVID-19 commercial rent debts now in place". GOV.UK. 24 March 2022. Archived from the original on 24 March 2022. Retrieved 29 September 2024.