Lease forfeiture moratorium extended until March 2022

As a result of the government’s Covid-19 measures, landlords found themselves in the position of facing the lease forfeiture moratorium for arrears being extended through to the 25th March 2022.

When extending the deadline, it was also stated that a new alternative means of resolving disputes in the landlord and tenant sector would be introduced to facilitate an earlier resolution of the potential high volume of disputes regarding rent arrears.

On the 4th August 2021, the government announced the outline of a new arbitration service. The details are still to be confirmed but there are some key indicators as to how this will begin to work in practice:-

• An updated statutory Code of Practice is to be introduced to provide a framework for negotiations between landlords and tenants;
• Landlords are expected to bear the financial burden of Covid-19 equally with tenants; for example, by deferring or waiving rent that accrued whilst their tenant was unable to operate and trade;
• Both landlords and tenants are encouraged to reach agreement and whilst the new arbitration process is hoped to be quicker and easier, it should only be used as a last resort to a negotiated settlement between the two parties;
• There are potential cost consequences for a party which does not negotiate in good faith and proceeds to arbitration. If however both landlord and tenant have endeavoured to act in good faith in seeking a solution, then each will be expected to bear the costs of the new arbitration process equally.

If you are a commercial Landlord seeking advice in relation to a tenant who has fallen into arrears, contact Amy-Jane Westaway GCILEx within our Dispute Resolution Team on 01604 828282 / 01908 660966 or email amy-jane.westaway@franklins-sols.co.uk.