Last year, the government announced that Section 82 of the Coronavirus Act 2020, which prevents landlords of commercial properties from being able to evict tenants for rent arrears, will end on 25 March 2022. In November, the government drafted a new piece of legislation, due to come in place in March 2022, intended to resolve disputes between commercial landlords and tenants relating to the payment of Covid-19 rent arrears.

Simon Waterfield, partner and specialist property dispute solicitor at Nelsons, looks at the Commercial Rent (Coronavirus) Bill and discusses the chaos that could occur in the transition period between legislation.

What is the Commercial Rent (Coronavirus) Bill?
“(It) is legislation issued by the government last month, which comes into force in March 2022, subject to its passage through Parliament, and is intended to resolve disputes between commercial landlords and tenants relating to the payment of Covid-19 rent arrear payments. The bill applies to England and Wales and has been introduced as a result of the estimated £7.5bn rent arrears due to landlords across the real estate sector.

“The definition of ‘rent’ includes service charges, late payment interest, insurance rent, and the requirement to top-up rent deposits where the landlord has drawn down on the deposit to cover rent debts accrued during the ‘protected period’.

“The bill will enable landlords and tenants to apply to an arbitrator to resolve any disputes regarding the ring-fenced rent debts and is supported by a new Code of Practice. This code offers guidance on how parties should resolve Covid-19 commercial rent disputes.”