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Written evidence reported to the House - Sitting 3
09 December 2021
Type
Public Bill Committee
At a Glance
Issue Summary
The statement discusses the introduction of a statutory arbitration process for resolving rent disputes between landlords and tenants in sectors hit hardest by the pandemic. The statement discusses the definitions and implications of 'protected rent debt' under the Commercial Rent (Coronavirus) Bill. The statement discusses Clause 4 and Clause 5 of a Bill aimed at establishing criteria for businesses affected by coronavirus restrictions to access arbitration for rent disputes. The statement discusses amendment 1 related to clarifying the definition of 'debt claims' for guarantors in business tenancies. Sheryll Murray is addressing amendments related to regulations under clause 9 and proposing an additional requirement for reporting on extensions of the arbitration period. Sheryll Murray is addressing amendments related to parliamentary scrutiny and transparency in the context of extending arbitration periods for rent arrears. The statement discusses the arbitration process for resolving disputes related to unagreed rent arrears and provides details on timelines and requirements for formal proposals.
Action Requested
The minister commends Clause 1 which provides an overview of the Rent Arrears Resolution (Coronavirus) Bill, introducing a framework for arbitration as a last resort when negotiations fail. The clause aims to protect businesses from certain remedies while debt is being resolved and encourages negotiated settlements where possible.
Key Facts
- An estimated total of just under £7 billion of rent was deferred over the pandemic.
- Rent collections in the third quarter are higher than last year's but not at pre-pandemic levels.
- The arbitration process will be a last resort for businesses unable to reach agreements with landlords.
- Clause 3 defines 'protected rent debt'.
- Protected rent includes rent owed under the tenancy if it was adversely affected by coronavirus.
- Interest due on an unpaid amount is considered part of protected rent debt.
- Clause 4 identifies businesses adversely affected by coronavirus if they were required to close all or part of their operations due to regulations from March 21, 2020, until July 18, 2021 in England and August 7, 2021 in Wales.
- Clause 5 sets the protected period for rent disputes to run from the start of closure requirements until the last day a business was required to close or subject to specific restrictions.
- The Bill aims to protect jobs and provide certainty for businesses in vulnerable sectors such as hospitality, retail, and leisure.
- Amendment 1 seeks to clarify 'debt claims' including claims against guarantors.
- The purpose is to prevent a back door where tenants are protected but guarantors remain liable.
- Guarantors need protection during the prescribed six-month period.
- Amendment 3 would require the Secretary of State to prepare and publish a report justifying extensions to the arbitration period.
- The amendment aims to enhance transparency and accountability regarding decisions on extending arbitration deadlines.
- Amendments aim to improve parliamentary scrutiny and transparency.
- Amendment 2 seeks to change the procedure for extending arbitration periods from negative to affirmative.
- Amendment 3 calls for the publication of reports explaining the reasons for any extensions.
- Clause sets out timings of up to 28 days for initial responses.
- Assessment made on businesses unable to reach satisfactory discussions beforehand.
- Each party has 14 days to respond with their own proposal after receiving the applicant’s.
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