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5 June 2020

Commercial Leases Disputes

The Government has announced a new compulsory arbitration scheme for small businesses who can’t agree a fair rent reduction with their landlord. 


Since we first posted about the effect of the lockdown on Commercial Leases, we have helped many of our clients, both landlords and tenants, successfully negotiate a temporary change in rental to get through the lockdown together.  Please contact our Property and Commercial Team for advice regarding your rights under your particular form of lease agreement. 


The government has also made temporary changes to the provisions of the Property Law Act that relate to termination of leases for failure to pay rent, including extending the time limits for compliance.  These changes took retrospective effect from 1 April 2020. 


The newly announced scheme applies when the tenant is a business with 20 or fewer fulltime equivalent employees on site.  Where agreement can’t be reached by negotiation, the government will subsidise the costs of going to arbitration.  This involves an independent Arbitrator looking at all the facts and circumstances.  The parties then have to comply with this decision. 


Details about the government subsidy scheme are expected to be released in the coming days, and our Litigation and Dispute Resolution Team will be ready to assist landlords and tenants who need to progress to arbitration.