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Published 6 agosto 2021
The UK Government published its latest policy statement this week on supporting businesses with commercial rent debts, as well as an analysis of the responses to its Call for Evidence on pandemic rent arrears.
Earlier this year, the UK Government announced a Call for Evidence from commercial landlords and tenants to better understand how businesses were responding to the build-up of rent arrears during the pandemic (see our previous article here for more details).
One of the key drivers for this was to help the Government decide what to do when the moratoriums on commercial rent recovery were, at that time, due to expire on 30 June 2021.
Then on 16 June 2021, the UK Government announced that the moratoriums would be extended to 25 March 2022. It also said that a mandatory binding arbitration process would be put in place for all pandemic-related rent arrears. The UK Government’s press release on its announcement can be found here.
This move was largely unexpected and sent reverberations throughout the property industry, particularly landlords who have seen rent debts rack up without receiving any payment over the past 18 months and with limited options for recourse.
Since then, the UK Government has finalised its analysis of the responses to the Call for Evidence. A link to the consultation outcome, published on Wednesday, can be found here.
Following on from this, the UK Government also published a Policy Statement (accessible here). This is the latest formal Government guidance on the subject since its surprise announcement in June.
A summary of the key points to take from the Policy Statement are as follows:
There is nothing particularly new coming out of the Policy Statement that has not already been set out in previous guidance. Unfortunately there is still a great deal of uncertainty on how the proposed arbitration scheme is meant to work in practice, so it remains to be seen what the process will ultimately look like.
We are unlikely to know anything further about this at least until the revised Code of Practice is published, which at the time of writing this article is expected in the Autumn.
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