Commercial Rent – COVID-19 Rent Arrears


The end of last month saw the end of the general moratorium on commercial evictions, which was introduced in response to the COVID-19 pandemic.  At the same time the Commercial Rent (Coronavirus) Act 2022 received Royal Assent.  The Act introduces a legally binding arbitration process in England and Wales for eligible commercial landlords and tenants who have not already reached an agreement to resolve outstanding commercial rent debts related to the pandemic.

The law applies to commercial rent debts of businesses including pubs, gyms and restaurants which were mandated to close, in full or in part, during the pandemic. Debts accrued at other times are not included.

Either the landlord or the tenant can take the other to arbitration without the other’s agreement. They must each submit a proposal and evidence about how the protected rent debt should be dealt with, ie. whether any should be written off or instalments allowed.  The arbitrator must implement the proposal that best maintains the viability of the tenant business without impacting on the solvency of the landlord. The other proposal is discounted – thus parties need to be reasonable in what they suggest.

The Royal Institution of Chartered Surveyors (RICS) has been selected by the Government to be an Approved Arbitration Body, authorising them to appoint chartered surveyors and other professionals to act as arbitrators under this legislation.  The RICS has developed the RICS Covid Rent Arrears Arbitration Guide, which supports users through the Arbitration Process.  For more information click here.

Castletons Accountants

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