Esther Marshall
Dispute Resolution
Arbitration Process for Commercial Rent Arrears
The Property Litigation Association has provided figures on the update of the government arbitration process for outstanding commercial rent arrears accrued during the pandemic.
The figures show a massive under-use of the system. There are reportedly billions of pounds in arrears of rent still outstanding. It is suggested that both landlords and tenants have been turned off by the uncertainty of the process, as well as the costs and time the process takes.
There was little guidance provided on how the arbitrators would apply the test of viability of the business, it would appear that both parties find a negotiated settlement a more attractive proposal. I also suspect many landlords are waiting for tenants to miss the deadline to allow them to determine how they wish to move forward unrestricted.
Holly Minney, Head of the Dispute Resolution team, said:
“In my view landlords were not willing to take the risk that the arbitrators may award a lower sum so have waited out the process to the end of the deadline.”