When the pandemic struck, businesses of all shapes and sizes were thrown into turmoil. Many saw trade stop overnight, and tough decisions had to be taken in order to keep businesses afloat. Fortunately, financial support was introduced by the government with the furlough scheme, Bounce-back Loans and other grants helping many businesses to survive. In addition, temporary changes to legislation were introduced to help struggling business, such as the introduction of strict restrictions on commercial landlords regarding if, or how, they could pursue rent arrears.

If we then roll forward to today, more than two years after the pandemic began, many of the businesses that survived that difficult period are starting to get back on track, and the economy is also beginning to recover. 

However, for commercial landlords; those individuals and businesses whose livelihood is renting out shops, offices, factories, and other spaces businesses operate from, the pandemic is still impacting them as many of the restrictions they faced during the pandemic remain in place. As a result, recovering rent arrears can be hugely problematic.

In essence, commercial rent arrears which occurred between the first lockdown in March 2020, and when lockdown restrictions ended, plus rent arrears relating to businesses which were forced to close down during the pandemic, cannot be pursued through the courts. Instead, commercial landlords are required to enter an arbitration scheme and its decision is binding. This means that there is little scope for a landlord to appeal if they are unhappy with the outcome of arbitration.

To complicate things further, not all rent is covered by this process, and the ability to pursue rent arrears in this manner is very fact specific, depends upon the type of business involved and the time period in question. This means that it can be both difficult for commercial landlords to pursue rent arrears, but also identify those arrears they can, and cannot actively pursue.

Fortunately, at TM Law, we are experts in helping clients recover commercial rent arrears, especially whilst post-covid restrictions remain in place. If you would like to find out more about our services and how we can help you, please give Terry a call on 01702 568220 or email him at info@tm-law.co.uk.

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