Conclusion of moratorium on pandemic rent arrears recovery

Rachel Chambers, Solicitor based in the Commercial Litigation team at mfg Solicitors

In response to the unprecedented challenges experienced by the retail and leisure sectors during the height of the Covid-19 pandemic, the government introduced the Commercial Rent (Coronavirus) Act 2022.

This legislation provided qualifying tenants in rent arrears which accrued during protected periods with a shield against enforcement action.

However, this protection was only granted for 6 months from the date that the legislation was introduced, and the government have not taken steps to extend this any further.

As a result, qualifying tenants were required to refer the matter for determination by an arbitrator by 23 September, so that a decision could be made about the amount of rent which needed to be repaid. After this date, the protective legislation fell away.

This means that from 24 September, if qualifying tenants have not made the referral to arbitration, enforcement measures previously unavailable to landlords became an option again, resulting in ‘business as usual’ for rent arrears enforcement.

The measures landlords may take include:

a) Commercial Rent Arrears Recovery (CRAR) – a statutory procedure which allows commercial landlords to take control of tenant’s goods and sell them to recover outstanding rent arrears.

b) Debt Recovery Proceedings – which involves issuing a civil money claim against the commercial tenant to obtain a County Court Judgment for unpaid rent, often in addition to interest and legal costs.

c) Insolvency Proceedings – either a winding-up petition for a company tenant, or a bankruptcy petition for an individual tenant. If granted by the Court, an insolvency practitioner would be appointed to collect in the assets of the tenant and distribute them amongst secured and then unsecured creditors.

d) Forfeiture – whereby a landlord exercises its right to determine the lease following a breach by a tenant of its lease obligations. In commercial leases, there is usually an express contractual right for a landlord to effect forfeiture by way of peaceable re-entry, without any order from the Court being required.

Whilst the protections afforded to tenants by the Commercial Rent (Coronavirus) Act 2022 have now come to an end, landlords and tenants should always be encouraged to engage in constructive dialogue to try and resolve disputes (whether this be relating to rent arrears or otherwise).

However, tenants must take heed that failure to reach an amicable agreement may result in enforcement action being taken by landlords now that tenant immunity has ended.

If you are a commercial landlord or tenant and this change affects you, contact the Commercial Litigation team at mfg Solicitors LLP who can provide you with expert guidance and assistance. Call 0845 55 55 321 or email