Covid Rent Arrears

England and Wales
10/11/2021
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The Government has finally announced its proposals for dealing with Covid Rent Arrears in its Commercial Rent (Coronavirus) Bill. The Bill will now be subject to the usual parliamentary scrutiny and may change as it makes its way through.

In the meantime the headlines are:

  • Sums captured by the ring fencing will cover rent, service charge, insurance, interest on sums and rent deposit top ups for tenants subject to mandated closures.
  • These sums will be protected rents for a protected period. The protected period will be the period beginning on 21 March 2020 and ending on the day when the premises were not subject to a closure or restrictions regulating the use of the premises (e.g. restrictions on numbers or operations such as table service only).
  • The Bill brings forward a scheme of arbitration to determine disputes as to Covid arrears.
  • The scheme of arbitration is proposed to last for 6 months from March 2022 and during that period enforcement of debts by court proceedings, CRAR, forfeiture or winding up will be prohibited.
  • While more detail will be provided the arbitrator will have powers to provide substantive relief on ring-fenced arrears including time to pay or a reduction in the amount due.

For further information and detail please do not hesitate to contact any member of the Real Estate Disputes team at CMS.

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