If you are a commercial landlord or tenant, you may be wondering if Covid Rent Arrears Arbitration could benefit you. The Coronavirus Act 2020 placed temporary restrictions upon the options available to landlords who were owed money from tenants. For example, the right to forfeit a lease was suspended as was the issuance of Statutory Demands. The protective period covered 21 March 2020 to 18 July 2021.
The impact of The Coronavirus Act 2020
Landlords were encouraged to explore alternative options such as allowing rent-free periods, allowing reductions in rent or alternatively, using deposits towards rent due without the requirement for these deposit balances to be replenished.
Regardless of the steps taken by either the landlord or tenant whilst the Act was in force, it follows that there are several cases whereby the parties have been unable to resolve the matter.
There may be landlords who have significant arrears due to them not only for rent but also for service charges, insurance, interest, and tax.
By the same token, there will be tenants who simply cannot afford to pay the sums they owe whilst they are getting back to business.
The Commercial Rent (Coronavirus) Act 2022
The Commercial Rent (Coronavirus) Act 2022 outlines the process for mediation between the parties with a view to reaching an equitable, feasible and binding solution.
Either party can instigate the process by serving notice on the other party. That notice must be accompanied by a proposal for settlement. The proposal should be accompanied by relevant financials that illustrate the proposal is affordable and achievable.
The arbitration process is designed to consider both parties and their respective
financial positions. It will be for the arbitrator to assess the viability of the tenant and the solvency of the landlord when making a determination as to the sums payable.
Putting together a proposal for settlement
It is therefore critical that the financials and accompanying explanation put forward by either party are accurate, easy to follow and support the relevant party’s position.
As we are experienced in the collection and management of commercial rent debt along with providing insolvency advice. We can assist either party in preparing their accompanying financial report or alternatively reviewing and assessing the validity of the other parties’ reports.
We can prepare the financial reports and documents required to accompany a proposal to satisfy section 11 of the Act as well as support either party through the process.
Are you on the fence about if you benefit from Covid Rent Arrears Arbitration?
The best thing to do is reach out to us to discuss your case, we can listen and give the best help for you depending on your circumstances. Our team are well experienced in the field to give you the best options moving forward:
