With the eviction moratorium officially over, occupiers and tenants are no longer protected if they fail to pay their rent due to the ongoing pandemic.

The challenge is now between  tenants and landlords to decide how they should deal with the accumulated £7 billion-plus rent debt. 

The Commercial Rent (Coronavirus) Act 2022, which received Royal Assent on the 24 March, 2022, plans to solve this worrisome-incurred debt. 

Paul Scully, Business Minister, explained the purpose of the new Bill. “This new law will give commercial tenants and landlords the ability to draw a line under the uncertainty caused by the pandemic so they can plan ahead and return to normality. Landlords and tenants should keep working together to reach their own agreements where possible using our Code of Practice to help them, and we’ve made arbitration available as a last resort. Tenants who can repay their rent debts in full, should do so, and when they cannot, landlords should try to share the burden, so we can all move on.”

The Bill will only apply to business tenancies under the Landlord and Tenant Act 1954. This protection will apply to all sums that are comprised within a lease, such as  insurance, rent and service charges, among others. 

Kate Nicholls, UK Hospitality Chief Executive, released a statement saying, “These are very welcome new laws for the hospitality industry: the Commercial Rent (Coronavirus) Bill is decisive government legislation to deal with the £7bn-plus rent debt accrued during the pandemic by businesses across all sectors. And as our sector tries to recover, it’s imperative that rent debt is dealt with, otherwise it’ll hamstring our recovery.”

While the government suggests that landlords and tenants should come to a mutual agreement, it will not be as easy as it seems. Those who fail to come to an agreement can apply for the arbitration unilaterally. Either the landlord or the tenant has six months to apply and the arbitration can assist in reducing the protected debt to pay or extend the time of payment of up to 24 months. This means that eligible firms are still protected for the upcoming six months or until the arbitration reaches a conclusion. 

Only appointed arbitrators can take part in the whole legal arbitration process. Interested arbitration bodies must undergo an approval process to check their ability to manage the scheme. The Department for Business, Energy & Industrial Strategy (BEIS) will be responsible for releasing the list of approved arbitration bodies. From there, concerned parties, which will most likely be the occupiers (tenants) and landlords, can apply to their preferred arbitrator. 

With the Commercial Rent Bill, the involved parties now have a similar ground to resolve their issues relating to the incurred rent. Occupiers and landlords must know that to benefit from this Bill, they must undergo both the pre-arbitration and eligibility stages.