Government unveils new code for Covid rent arrears disputes
The government has published a Bill outlining an arbitration process and code of practice to resolve disputes between commercial landlords and tenants over rent accrued during the pandemic. The government plans to have the new
system in place by March 2022, when temporary rules protecting commercial tenants from eviction end. In the interim, the government plans to introduce the new code of practice to help negotiations. 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.” British Property Federation chief executive Melanie Leech described the new code as “a clear signal and framework” for a “minority” of tenants and landlords “to come together, reach agreement and look to the future”. “Property owners and their tenants should be wholly focused on working together to continue the economic recovery from the Covid-19 pandemic,” Leech said. “The majority have already reached agreement on the treatment of Covid-related rent arrears, with millions of pounds of support being provided by property owners to tenants in distress.” Others said the initiative raises more questions. “We have been unwavering in our position that collaboration and engagement between property owners and tenants is key to getting through the challenges of the pandemic, so broadly welcome the tone of the revised code,” said Adam Coffer, chairman of the
Property Owners Forum. “But in terms of the proposed legislation and arbitration procedures, we await further detail as to how our concerns expressed to government are being addressed.” Those include a lack of differentiation
in the “blanket approach” between the largest REITs and smaller or individual owners, Coffer said, as well as confirmation that wider group ownership of properties will be taken into account in the affordability criteria. Coffer added: “We all know that the narrative, politically, will always be anti-landlord, who are portrayed as pinstriped, cigar-chomping barons, which is so far removed from the truth that every man and woman in the country is a property owner through our pensions, charities, local authorities and so on.”