COVID-19 & Commercial Rent Arrears

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Xeinadin Group

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The Government has issued a policy statement on ring-fencing COVID-19 commercial rent debts and introducing binding arbitration.

Section 82 of the Coronavirus Act 2020, prevents landlords of commercial properties from being able to evict tenants for the non-payment of rent, will continue until 25th March 2022.

As soon as legislation is passed, the commercial tenant protection measures will only apply to ringfenced arrears. This includes rent debt accrued from March 2020 by commercial tenants affected by COVID-19 business closures until restrictions for their sector were removed.

This means that landlords will be able to evict tenants for the non-payment of rent prior to March 2020 and after the end of restrictions for their sector and who have not been affected by business closures during this period.

Alongside this, to support negotiations between tenants and landlords further before the new legislation is enacted, the Government has:

  • extended to 25th March 2022 (unless legislation is passed ahead of this) the restriction on the use of the Commercial Rent Arrears Recovery, which restricts the ability of landlords to seize goods owned by the tenant in lieu of rent owed unless the tenant has more than 554 days’ worth of rent arrears
  • extended the restrictions against serving a winding up petition on the basis of a statutory demand implemented through the Corporate Insolvency and Governance Act 2020 until 30th September 2021

For businesses suffering from COVID-19 related rent arrears, these measures provide valuable breathing space.  If this applies to your business, it is important that you use this extra time to take advice on the options available to you.  Please call one of our Corporate Recovery Partners on 0161 832 6221 for advice tailored to your business.

For more information visit gov.uk

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