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Tue 9th Nov 2021 - New laws and code of practice introduced in bid to address £7bn rent debt dispute
New laws and code of practice introduced in bid to address £7bn rent debt dispute: New laws and a code of practice have been introduced to resolve the remaining commercial rent debts accrued because of the pandemic. Landlords will not be able to chase business tenants for rents through the courts, under a temporary measure announced by the government, in a move aimed at encouraging firms to negotiate £7bn of debts accrued during the pandemic. A ban on business evictions has been in place since the start of the covid crisis and is due to end in March 2022. The government has now given businesses more breathing space. It said commercial tenants will be protected from debt claims, including County Court judgements issued against them in relation to rent arrears from when they had to close for lockdowns. A number of companies have already set up rent agreements, including writing off some debts and payment plans. If not settled by next March, an arbitration process will be in place to resolve disputes if needed. A new code of practice, providing landlords and tenants with a process for settling outstanding debts, has also been introduced. It sets out that, in the first instance, tenants unable to pay in full should negotiate with their landlord in the expectation that the landlord waives some or all rent arrears where they are able to do so. Business secretary Kwasi Kwarteng said: “We encourage landlords and tenants to keep working together to reach their own agreements ahead of the new laws coming into place, and we expect tenants capable of paying rent to do so.” UKHospitality chief executive Kate Nicholls added: “We welcome the publication of the updated code of practice. Vitally important is the emphasis on ongoing negotiation to share the burden of the impact of lockdowns and restrictions that prevented hospitality businesses from trading for so much of the last 18 months. It is in the long-term interests of landlords and tenants to come together and find solutions that ensure business survival and that do not undermine the economic recovery. We share government’s view that arbitration should be a last resort and this process must take into account the exceptional and existential level of pain that hospitality businesses have faced over the last 18 months. It must not impact this industry’s ability to rapidly recover and create jobs throughout the country.”


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