The service is designed to ensure a clear, balanced dialogue between landlord and tenant, including an incisive analysis of the tenant’s grounds for non-payment and the landlord’s prerequisites for making concessions, and comes in response to MHCLG’s recently launched Code of Practice for commercial property relationships during the COVID-19 pandemic.

The Code of Practice contains recommendations that landlords and tenants use a third-party mediator to help with any payment negotiations during this difficult period of time.

To ensure the new service would help all parties involved, RICS consulted widely across the sector. Following the consultation, the RICS product aims to alleviate the pressure on both tenants and landlords and:

• Give tenants a ‘safe space’ to articulate their difficulties and have landlords recognise them
• Ensure landlords have a rigorous dispute resolution process to ensure all parties can maintain a positive working relationship post COVID. 

As part of the process, the Commercial Rental Independent Evaluation Service rules provide a tight timetable and clear structure for evidence to be presented and examined by an RICS appointed independent evaluator.

The service also sets out a clear and affordable schedule of fees, for both small and large properties, ensuring the costs are matched to the size of the dispute. Evaluators also and aim to provide a resolution within 28 days.

Dr John Fletcher, RICS director of dispute resolution, said: “We hope that this service will contribute to the recovery of a fully functioning commercial market as the sector navigates this difficult time period, and will provide landlords and tenants with the inclusive and safe space they need to work out how to resolve any disputes.

“RICS recognises that parties need a safe, unbiased pair of hands, appointed and overseen by a manifestly independent institution to guide them through these unprecedented times, As a provider of dispute resolution services in the commercial sector for nearly forty-five years, our panellists include the most experienced practitioners in the market, who can help restore confidence.”

Steph Yates, senior consultant at Remit Consulting, commented: “While the pandemic was something no one expected, the fallout over non-payment of rents is leading to a fractious break-down of some landlord and tenant relationships, which will have long-lasting impacts on the sector, investments and the economy.

“Our research suggests that the rental income lost to the UK’s property industry totalled £1.5 billion for the March quarter alone, to the detriment of the annual returns for pension funds, insurance businesses, REITS and other investments. At some stage this will begin to impact the incomes of large parts of the population and the wider economy.

“The Government’s Code of Practice called for landlords and tenants to act responsibly and suggests the use of a third-party mediator to help. The introduction of RICS’ Commercial Rental Independent Evaluation Service is a means to resolve these outstanding disputes in a cost effective and timely manner. The sooner landlords and tenants can agree terms, the sooner we will see a semblance of normality return to commercial property.”