The UK government is proposing new rules that could prevent struggling retailers from exiting rental properties even after their lease has expired. The Department of Levelling Up, Housing and Communities (DLUHC) plans to introduce an arbitration code that would require landlords and tenants to go into arbitration during Covid-related disputes. While this code aims to provide a framework for resolving conflicts, it could result in tenants being ordered to stay in properties they can’t afford to rent.
The controversial potential ban on tenants leaving rental properties has raised concerns about trapping them in unaffordable rentals. Helen Dickinson, the chief executive of the British Retail Consortium, supports compulsory arbitration but highlights the need to address key issues. She emphasizes the importance of determining how much tenants should pay for stores they weren’t allowed to open and clarifying arbitrators’ powers in imposing payment plans that may not be desired by either party.
These proposed rule changes have significant implications for both landlords and tenants in the retail sector. While the intention is to address disputes and alleviate pressure on the courts, it is crucial to consider the potential consequences for struggling retailers. Finding a balance that supports the interests of both parties, especially during these challenging times, is crucial for the long-term viability of the retail industry.
Useful Links:
1. Government Guidance on Arbitration in Commercial Property Rent Disputes
2. BRC’s Perspective on Extending Moratoriums on Rent Arrears
