The Commercial Rent (Coronavirus) Act 2022 and Protected Rent Debt (PRD)

On 24 March 2022, the Government a new, temporary, law: the Commercial Rent (Coronavirus) Act 2022.

Businesses lost a lot of income during the lockdowns and often could not pay their rents. To stop businesses collapsing, landlords were prevented from recovering rents during the “moratorium” on commercial rent recovery. Rent debts from that period are called “protected rent debt” or just “PRD”.

Relevant Period

Many commercial tenants in England & Wales were forced to their premises due to Government lockdown restrictions from March 2020 – July 2021 (August in Wales) This time is now defined in law as the “relevant period.” What the “relevant period” is differs according to the type of business.

For example:

• For hospitality and nightclubs this was 23 March 2020 to 18 July 2021, a period of 15 months and 27 days.
• For non-essential retail the period was 21 March 2020 to 12 April 2021, a period of 12 months and 22 days.
• Other types of business who were forced to close by the government have different “relevant periods”.

If your business qualifies, you could be eligible for rent relief from your landlord.

Binding Statutory Arbitration

The Commercial Rent (Coronavirus) Act 2022 creates a temporary right to a binding statutory arbitration system to seek rent relief.

Under this system an arbitrator can order your landlord to write off up to 100% of your protected rent debt.

Alternatively, or in addition, the arbitrator can give you extra time to pay protected rent debt – up to 24 months.

So, in the example above, if your business was in the hospitality or nightclub sector, you could be eligible for up to 15 months and 27 days of rent relief. For non essential retail, this could be up to 12 months and 22 days of rent relief.

Deadline

If you think you are eligible you must act urgently. The time to bring a claim is limited to just 6 months from 24 March 2022. The last day to issue Covid rent claim is 23 September 2022.

HOWEVER, you need to have issued the landlord with your initial letter by (at the very latest) 22 August 2022 to make a claim. So your “real” deadline is 22 August 2022, but you need to be taking action as soon as possible.

Claims where an initial letter is sent by 22 August 2022 and the arbitration has commenced by 23 September 2022 will continue after that deadline, but no new claims can be made after that deadline.

The government has made it clear that landlords should share the burden with tenants.