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New law to resolve Covid rent debt

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The Government has set up an arbitration system to help resolve outstanding commercial rent debt. This is following the general moratorium on commercial eviction ending.

Covid Debt

From 25 March, a legally binding arbitration process is available. This is in place for eligible landlords and tenants who have not yet reached an agreement.

The Government hopes this will resolve disputes about pandemic-related rent debt and help the market return to normal.

The law applies to commercial rent debt of businesses that were mandated to close under Covid lockdowns and restrictions. This applies if it was in part or in full. And includes the timescale from March 2020 until the date restrictions ended for their sector.

During the pandemic, commercial tenants received a moratorium on evictions, which ended on 24 March 2022 in England and Wales.

However, eligible businesses remain protected for the next six months, during which time arbitration can be applied for.

Business minister Paul Scully said:

“This new law will give commercial tenants and landlords the ability to draw a line under the uncertainty caused by the pandemic. Therefore, they can plan ahead and return to normality.

“Landlords and tenants should keep working together to reach their own agreements where possible. But also, using our code of practice to help them. Further to this, we’ve made arbitration available as a last resort.”

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