Recovery of Covid-19 arrears following the Commercial Rent (Coronavirus) Act 2022

In reality, to have provided the necessary notice to the other party, which needed to allow 28 days before making a referral, the deadline passed from 28 August 2022.

Under the Act, landlords were prevented from taking any action in respect of arrears that arose during the protected period under a business tenancy. The protected period began on 21 March 2020 and ended on or before 18 July 2021, dependent upon the nature of the tenant’s business and when it was subject to compulsory closure orders. Those arrears were referred to as protected rent debts under the Act.

As there has been no announcement by the Government to extend the deadline under the Act, it is now open to landlords to utilise all of their pre-pandemic powers to recover arrears which fell due in the protected period.

Therefore, landlords are now unfettered in their ability to recover these arrears by way of debt claims, commercial rent arrears recovery (CRAR) or drawing down on a tenant’s deposit. In addition, it is now possible for landlords to seek to forfeit by peaceable re-entry for any of those arrears that are reserved as rent under the lease.

It should be borne in mind by landlords and tenants alike that the Act, like the Coronavirus Act 2020 before it, provided that nothing short of express waiver in writing would be regarded as waiving a right of re-entry or forfeiture in respect of protected rent debt. As a result, landlords are now free to forfeit in respect of all arrears which are reserved as rent under the lease and arose during the protected period.

Landlords who intend to forfeit for such arrears should be mindful not to act in a way that may now waive their right to forfeit, as that is now possible following the expiry of the Act and the moratorium.

Tenants should be aware that their landlords may take such steps in the coming days if there remains outstanding protected rent debt.

Whilst the Act has ended and matters of rent arrears return to their pre-pandemic state, parties should remember that issues surrounding unresolved protected rent debts arrears are still very much in play.

This is especially the case given that the Court of Appeal, in Bank Of New York Mellon (International) v Cine-UK Limited and London Trocadero (2015) LLP v Picturehouse Cinemas Limited and others, has confirmed that rent is payable for all periods during which a tenant was prevented from trading due to lockdown restrictions.

If you would like to find out more about the Recovery of Covid-19 arrears following the Commercial Rent (Coronavirus) Act 2022 please contact Rhys Baker.