COVID-19 Commercial Rent Arrears: UK Government Publishes Draft Arbitration Rules

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The rules provide an arbitration procedure to determine the amount of affordable rent arrears for a commercial tenant where landlord and tenant have been unable to reach a consensual agreement.

On 9 November 2021, the UK government published the Commercial Rent (Coronavirus) Bill (the Bill), which will implement an arbitration process for determining the amount of rent arrears payable by commercial tenants affected by COVID-19 restrictions if landlords and tenants are unable to reach an agreement bilaterally. The Bill, which is subject to parliamentary passage, is expected to become law and enter into force on or prior to 25 March 2022, which is the date on which the current moratorium on forfeiture and restrictions on use of the commercial rent arrears recovery (CRAR) regime expire. The government also published a new accompanying Code of Practice, which takes effect immediately.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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