Commercial Rent (Coronavirus) Act 2022

The Commercial Rent (Coronavirus) Act 2022 (“the Act”) was enacted on 25 March 2022 and is due to end on 23 September 2022 (unless it is extended by the Secretary of State).

The Act introduced a legally binding arbitration process to resolve disputes concerning commercial rent arrears accrued due to businesses being closed during the COVID-19 pandemic.

The arbitration scheme is available for all eligible commercial landlords who have not reached an agreement with their tenant. The aim is to resolve disputes in relation to the pandemic rent debt and help the market return to normal as quickly as possible. The Act restricts the actions a landlord can take against their tenant to recover unpaid rent.

In order to start the arbitration process, various preliminary notices and responses must be issued before the matter is referred to arbitration. No reference to arbitration can be made until 28 days following service of a preliminary notice. Therefore if a tenant wishes to maintain its right to make a reference to arbitration, they must have served a preliminary notice by 26 August 2022.

What happens after 23 September 2022?

The Act contains provisions giving the government the power to make regulations extending the six-month period for referring a matter to the scheme. However, there has been no indication that the scheme will be extended.

Therefore, assuming that the six-month period is not extended after the 23 September 2022:

Parties will have to complete the arbitration process in respect of referrals made before 23 September 2022. The usual methods of enforcement will not be available to landlords in these cases.

The arbitration scheme will not be available for any new cases, and therefore a landlord can use the normal remedies to recover any rent arrears (including those arrears which were previously protected by the Act). The current options available to the landlord are below.

The COVID-19 Rent Arrears Arbitration Scheme 

Commercial Rent Arrears Recovery Scheme

The Commercial Rent Arrears Recovery Scheme (“CRAR”) can be used to recover the rent arrears provided the statutory requirements are met and the unpaid rent reaches the minimum threshold. CRAR applies to tenancies (but not licences) of commercial premises, provided the tenancy is in writing.


If the landlord wants to take back possession of the property, they may consider forfeiting the lease. A landlord can forfeit a lease for breaches of the lease provided that they have not waived their right to do so and are subject to the lease containing an express right to forfeit for such

Court Proceedings

Court proceedings can be issued to secure a County Court judgment in respect of the rent arrears.

Action against guarantors

Quite often, leases will have guarantees in place and on the assignment of leases which were entered into on or after 1 January 1996, Authorised Guarantee Agreements will have been obtained. In those circumstances, not only can a landlord pursue the tenant, but it can also take action against the guarantor.

Rent Deposits

A landlord may want to consider drawing down on a rent deposit to claim back any arrears. It is important to check whether the rent deposit allows the landlord to drawn down for unpaid rent. Most rent deposit deeds would allow it subject to the relevant notice provisions being followed.

Serve a statutory demand

A landlord can serve a statutory demand (and potentially present a bankruptcy/winding up petition) in respect of unpaid arrears.

Here to help

If you have any more questions or would like more information regarding the COVID-19 rent arrears scheme, you can contact our Property Litigation Team below.

Contact Myerson Solicitors

Complete the form below, or alternatively, you can call Myerson Solicitors on:

0161 941 4000