Recovery of rent arrears by arbitration

On 9 November 2021, the UK Government announced a new voluntary code of conduct to resolve outstanding Covid commercial rent arrears, together with a draft Bill introducing an arbitration scheme for rent arrears that accrued during the pandemic for business tenants who suffered mandatory closures.  The arbitration scheme is intended to be a time-limited last resort where a consensual resolution cannot be reached.  This Bill will need to go through due process and may change before it finally becomes law.  At the moment, the moratoria on landlord enforcement are due to expire on 25 March 2022 and we expect the Government will seek to make this arbitration scheme law before that date.  Pending the introduction of the new arbitration scheme, the Government has announced that in addition to existing measures to protect tenants, landlords will be unable to pursue debt claims for these ringfenced pandemic rent arrears.  This image summarises the current proposals for the new arbitration scheme.

For an easy to view image, please download this pdf.