SHOWNOTES | March 25th, 2022, provides another watershed moment as we move out of the pandemic and into what we hope will be a better period for business. The Commercial Rent (Coronavirus) Act 2022 (CRCA) is now law and it gives welcome relief to some landlords, and difficult issues to be faced by some tenants.
Well before this Act became law it published a code for landlords and tenants to help resolve commercial rent issues and this Code now sits alongside the new Act
(see – https://www.gov.uk/government/publications/commercial-rents-code-of-practice-november-2021)
Certain business tenants will continue to enjoy protection from the immediate return of the CRAR (Commercial Rent Arrears Recovery) process. The criteria for coming within the scope of the CRCA’s protection includes |
· The affected tenancy, must be defined as a “business tenancy” under Part II of the Landlord and Tenant Act 1954
· The business and/or the business’s premises were required to close either fully or partially as a result of the Government’s mandates under the Coronavirus Regulations
- The categories of business that come within this definition included
- Indoor leisure
- Outdoor sports and leisure
- Theatres and cinemas
- Large events venues
- Hospitality and nightclubs
- Non-essential retail
- Garden centres
- Personal care
- Hairdressers
- Hotels and B&Bs
- And self-contained tourist accommodation
· The period of the rent arrears is stipulated as falling within a “relevant period” starting at or after 2pm on 21st March 2020 and ending at or before 11:55pm on 18th July 2021 (in England) or 6am on 7th August 2021 (in Wales)
· The extent of the “protected rent debt” extends to the rent itself, service charges (including repairs), maintenance, management costs, insurance premiums and interest on the amount of the debt.
Any of the types of businesses listed above may have incurred debts due to non-payment of rent and as a result will now come within the “protected rent debts” definition. The critical point here is that Protected Rent Debts cannot be subject to the CRAR or Forfeiture procedures.
Instead, The CRCA sets out a binding rent arbitration scheme, where a tenant who has a protected rent debt can take advantage of the arbitration scheme within six months of 25th March 2022. Landlords or tenants will now have until the 25th of September 2022, to apply through an arbitration process, on how the rent arrears will be managed and this end date may itself be extended if the Government consider it necessary.
For those tenants who do not fall into a protected category as listed above, then after 25th March 2022, commercial landlords will once again, be able use the normal means of commercial rent recovery including CRAR, Forfeiture, Winding Up, or securing a judgment or order.
If you find yourself as a landlord wanting to chat through your options post 25th March 2022, we offer a FREE review service for any lease or tenancy situation to get you on track.
We are here to support those that need enforcement services for their businesses so reach out to us at [email protected], on our phone lines at 020 3588 4240 and on any of our social channels.