The British Retailer Consortium (BRC) is arguing for the creation of a new arbitration process to help find a solution to the issue of billions of pounds being owed to commercial landlords across the country.
According to the Financial Times, the BRC has written to the UK government’s housing secretary Robert Jenrick arguing that arrears accrued over the course of the pandemic should be viewed differently from a legal perspective than would be normal.
The BRC has suggested it wants to see unpaid rent accumulated between March 2020 and June 2021 ringfenced to give debtors legal protections for a period so they can attempt to recover their financial positions in the coming months.
Part of the retail consortium’s suggested plan would be to give businesses and their landlords a period of six months within which they can attempt to find an agreement on how best to proceed without legal action being allowed to be taken by creditors.
Where it is not possible for the parties involved to find an agreement within six months, the dispute could then become the subject of a binding arbitration process, the BRC has said.
According to Remit Consulting, retailers are estimated to account for roughly half of the £6 billion currently owed as rent arrears to commercial property owners.
Deals have been struck between renters and landlords in relation to huge numbers of properties across the country in recent months and throughout the pandemic but disputes are nonetheless widespread and the sums involved are collectively very large indeed.
The Financial Times has seen the letter sent to Mr Jenrick by the BRC and noted that similar proposals have been put forward by representatives of the hospitality sector and the British Property Federation.
The letter from the BRC is reported to have said that “retailers want to be given the opportunity to trade their way out of debt” and suggested that creating a new mechanism for dispute arbitration “gives them the space to be able to do so”.
Evictions and the issuing of winding up petitions have not been permitted during the pandemic but those legal protections are due to be removed from the end of June.
There are concerns that unless some further protections are put in place there might be a huge wave of cases relating to disputes of commercial rents being brought before the courts.