PwC comments on the updated Code of Practice for Covid-related rental arrears announced by the Government

Commenting on today's government announcement on the updated Code of Practice for Covid-related rental arrears

Mark Addley, real estate restructuring leader and PwC partner, said: 

"The announcement from the Government today brings the possibility of arbitration closer for tenants and landlords. However it is clear that the best solution for both parties remains a consensually negotiated settlement.  If this cannot be achieved then the costs and time consumed in an arbitration process could be excessive.  

"While businesses are also dealing with a raft of ongoing staff, supply chain and inventory management issues, there are only 20 weeks left including the festive period before 25 March 2022. The clock is well and truly ticking. Landlords and tenants, especially those in the retail, casual dining and wider leisure sectors should be working together now - or building up their evidence for an arbitration process.  

"Our restructuring teams report that many tenants and landlords have either agreed deals on Covid-related rent arrears, or are actively seeking to do so. Landlords are acutely aware of the prospect of insolvency processes in the first and second quarters of 2022. As a result they are willing to negotiate -within reason- on discounting arrears."

Ends

More PwC insight can be accessed here

The revised code of practice for commercial relationships between landlords and tenants following the COVID-19 Pandemic can be accessed here https://www.gov.uk/government/publications/commercial-rents-code-of-practice-november-2021