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Government announces further support for commercial tenants

In a press release on 16 June, the government announced further support for commercial tenants. Landlords and tenants are expected to agree on the treatment of rent arrears that have arisen due to the COVID-19 pandemic or be subject to a binding arbitration agreement.

Most significantly, a new law will be passed to ringfence rent arrears that have built up due to a business having to remain closed during the pandemic. Landlords and tenants will be required to come to an agreement on the treatment of the arrears, for example, waiving some of the amount due or agreeing a longer-term repayment plan. If agreement cannot be reached, a binding arbitration process will be put in place that ensures a legally binding agreement is made.

Existing provisions protecting tenants, such as forfeiture of business tenancies for non-payment of rent, are to continue in England until 25 March 2022. Service of statutory demands and winding up petitions will remain restricted for a further three months and the minimum net unpaid rent that must be outstanding before commercial rent arrears recovery will remain at 554 days.

The government reiterates it intends to carry out a review of commercial landlord and tenant legislation later this year.