What will the end of the Commercial Rents Act mean for business owners?

October 28, 2022

What was the Commercial Rents Act 2022?

The Commercial Rents Act 2022 was brought in by Parliament in March this year with the intention of protecting viable businesses from eviction or enforcement measures, in relation to rental arrears accrued during the pandemic. The Act introduced a statutory arbitration process, put in place to encourage landlords and commercial tenants to resolve any rent arrears informally, with an application for arbitration to be made as a last resort. Under this Act, landlords could not pursue Commercial Rent Arrears Recovery action or a Winding Up Petition to recover these debts. However, as the Commercial Rents Act came to an end as of the 24th September, what does this mean for commercial tenants with continued rent arrears?

What will happen now the Commercial Rents Act has ended?

This will largely depend on the landlord’s situation and the extent of the debt owed. If a landlord will easily re-let the commercial property, and at a potentially higher rate than before, it is likely that they will pursue legal action against the business. Where this is the situation, it will be prudent for business owners to consult with an insolvency practitioner. Professional consultation can help business owners to come to an arrangement with the landlord to repay the debt or, if the business is no longer viable, how to effectively close the business.
Where businesses remain viable, with the means to repay the arrears alongside their current rent, it is likely that a repayment agreement can be reached to satisfy both parties. If this is possible it will incur less expense than an official arbitration process.


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What action can commercial tenants take?

The exact impact of the Act’s expiry will be remains unclear. Although, the increased pressures on many business outgoings at the moment suggests there is likely to be an increase in rent arrears disputes in the coming months.

The majority of landlords would prefer to have a paying tenant in situ rather than an empty property, so seeking a repayment arrangement early is advisable.

If you are a commercial tenant already facing recovery action, we would strongly recommend that you seek professional advice.

How we can help

We have extensive experience in advising on commercial rental arrears and we will always work with you to find the best solution for your business.

One of our Partners would be more than happy to have a non-obligatory confidential chat with you. We can be contacted at rescue@opusllp.com or call us on 020 3326 6454 and we will arrange for a call with one of our Partners.



This guidance article was written by our Insolvency Practitioner, Ian McCulloch Partner at Opus.

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