CTA requests 50 percent waiver of rental arrears

Just a few days ago, The Times reported that The Commercial Tenants Association has written to the Communities Secretary, Robert Jenrick, to request for landlords to waive 50 percent of the rental arrears debt which is to be subsequently paid by taxpayers. This is akin to the Australian-style model whereby it is mandatory for landlords to offer a rent reduction of up to 100% relating to the period in which the tenant was closed for business as a result of the pandemic.

It is estimated that around £6 billion of unpaid rent has built up in the UK since the government imposed a moratorium on forfeiture action, which is now extended to 25 of March 2022.

The Commercial Tenants Association represents 500 businesses ranging from insurers to retailers and they are pushing hard for this, whilst others have argued that this is simply a case of moving the debt around.

Notwithstanding their proposal, we know our Government has something slightly different in mind having published a policy statement just a few days ago; a plan to ring-fence rent arrears that accrued during the pandemic 'restrictions' which requires parties to negotiate those arrears, failing which, they must enter into mandatory arbitration to determine the amount of arrears to pay and by when. However, businesses that are able to pay rent are required to do so.

It will be interesting to see how the communities secretary deals with these renewed calls from commercial tenants but in the meantime, both landlords and tenants are advised to seek legal advice on debt-related matters.

Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to clients of BLM. Specialist legal advice should always be sought in any particular case.

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