The Retailer Spring Edition 2022


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David Jones Property Disputes Solicitor Womble Bond Dickinson

D AVID JONES OF WOMBLE BOND DICKINSON DISCUSSES THE NEWLY PASSED LAW AND ITS IMPLICATIONS ON YOU. A new law has been passed in March 2022 (the Act) dealing with some of the unresolved rent arrears for commercial premises which accrued during the pandemic, and setting out a new arbitration scheme for “Protected Rent”. This law has been on the cards for some time having been working its way through parliament since November 2021 following its initial announcement that August. Since the lawwas passed on 24March 2022 a period of 6 months began for retailers to refer disputes to the arbitration scheme, though there is scope for ministers to extend this. This means that you would need to have notified the landlord of your intention by 26 August 2022 to ensure you can use the scheme. What benefits can BRC Members potentially achieve using the bill? To the extent that your Rent is caught by the Act the arbitrator could decide to:

What do BRC members need to be aware of? The Act covers only Protected Rent for a specific period as defined. This differs with regards to when theywere allowed to re-open without restrictions. For those dubbed at the time as non-essential retail, it covers only Rent apportioned to the period 21 March 2020 – 12 April 2021. If you have arrears attributable to any other period, it will be important to liaise with your landlord to discuss your options to repay these. There is a code of practice that covers these arrears, but this is voluntary. The landlord’s rights to forfeit the lease, take control of your goods or issuing winding up periods once again became available on 25 March 2022. What can BRC members expect if they are seeking to rely on the new law? Either a tenant or a landlord can make a reference to the scheme. They need to notify the other party and can then proceed to make the reference after 14 days if there is a reply or 28 if there isn’t any reply from the other party. The arbitrator will then decide whether they can accept the referral. To be eligible for the scheme, you need not only to have a Protected Rent Debt, but your business must also be viable, excluding the impact of the Protected Rent Debt. What is considered to be viable can vary depending on the industry you trade in. However, as a rule of thumb if, setting aside the Protected Rent Debt, your business can meet its obligations and continue trading I would expect this to be sufficient.

• Write off all or part of the Arrears. • Allow up to 2 years to make payment. • Write-off any interest. These powers are referred to as relief from payment.

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