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Nyree Applegarth - Is fair commercial landlords might have to wait even longer for unpaid rents as a result of coronavirus legislation?

9th July 2021

Nyree Applegarth - Is fair commercial landlords might have to wait even longer for unpaid rents as a result of coronavirus legislation?

Nyree Applegarth, a Partner in the Higgs Dispute Resolution and Litigation team, questions whether it is fair commercial landlords might have to wait even longer for unpaid rents as a result of coronavirus legislation.

Whilst there are encouraging signs that England may be returning to normality as from the July 19 it appears that in the sphere of commercial property the government has pushed some thorny issues into the long grass.

There has been a bar on for forfeiting commercial leases for unpaid rents (by changing the locks) for over a year now and although the government clearly needed to do something after the end of June 2021 when the current ban was due to expire, is it right that it has been extended until the end of March 2022?
 
It appears that the government is now intending to introduce new legislation to ringfence rent arrears that have built up for businesses that have had to remain closed during the pandemic and is going to require landlords and tenants to come to an agreement on the treatment of the arrears.

It is suggested that some of the arrears will have to be waived and never paid or the parties will have to enter into a long-term repayment plan. If the parties cannot reach agreement then a binding arbitration process is going to be put in place to which both parties will have to adhere.
 
These are undoubtedly unprecedented times but is it fair that a commercial landlord who has not been paid for over a year (perhaps in controversial circumstances where it knows a tenant has Government grants or loans) can be forced to accept they will receive no income for a period?

Obviously, we will have to await the detail of the new legislation but I cannot help but feel that even the suggestion of a binding arbitration process solves very little and in any realistic time scale.  

With the best will in the world I don’t envisage a situation where parties are going to have ended the arbitration process much before the end of 2022, which conceivably means that the landlord will have been stood out of over two years money by the time the process has been concluded.

These are difficult times for commercial landlords. Speak to our experienced team to ensure you are fully abreast with the latest legislation as it emerges.

 

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