Government Arbitration Scheme & Rent Moratorium Extended

The Government has announced its plan for a new mandatory statutory arbitration procedure for commercial leases, to resolve disputes arising out of the Covid pandemic; in addition, it has further extended the rent moratorium to 25 March 2022.

Details of the proposed legislation is awaited however, landlords and tenants are likely to be required to submit their rental disputes to arbitration, which the Government has suggested “could be done by waiving some of the total amount or agreeing a longer-term repayment plan”; this will be delivered by private arbitrators whose impartiality has been approved, acting in accordance with guidelines to be set out in the new legislation.

This will presumably replace the Government’s voluntary Code of Practice issued in June 2020.

The Government has also extended to 25 March 2022 the temporary ban on the use of forfeiture for non-payment of rent, Commercial Rent Arrears Recovery (CRAR) and the issue of statutory demands and winding up petitions where a company’s inability to pay is due to COVID-19.