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Commercial Estate & Letting Agents

Commercial Rent Arrears Recovery (CRAR)

The documents below can be used in connection with the Commercial Rent Arrears Recovery procedure ("CRAR"), which has been in place since April 2014.

CRAR replaced the old remedy of distress, which allowed landlords to seize and sell property belonging to a tenant who had rent arrears. The new regime is more limited in scope and sets out a prescribed enforcement procedure.

A landlord wishing to use CRAR must appoint an enforcement agent (otherwise known as a bailiff) to act on his behalf. The enforcement agent will then serve notice on the tenant warning him that the CRAR procedure will be used unless the tenant settles the arrears by a specified date. If the arrears are not paid by that date, the enforcement agent may enter the tenant’s property and take control of goods belonging to the tenant. Further notices need to be served once the property has been entered.

If there is a sub-tenant of the property, the landlord has an alternative to appointing an enforcement agent to take control of the tenant’s goods. The landlord can instead serve notice on the sub-tenant requiring the sub-tenant to pay its rent to the landlord rather than to the tenant. There are notices below for the landlord to send to the sub-tenant.

These documents will be of use to landlords and enforcement agents exercising Commercial Rent Arrears Recovery (CRAR) powers. 

The general six-month protected-rent referral and moratorium window under the Commercial Rent (Coronavirus) Act 2022 ended in September 2022. A protected rent debt referred to arbitration within time remained subject to its moratorium until that arbitration concluded. Do not treat the 2022 Act as a general current suspension of CRAR; check any case-specific historical arbitration. 

Commercial landlords and letting agents should check the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 where the tenant is an individual, including a sole trader. Rent arrears are excluded as a 'non-eligible business debt' only if they were incurred in connection with the tenant's business, relate solely to that business, and, at the point of the application for a moratorium, the tenant is for the purpose of that business VAT-registered or a partner in a partnership. An individual tenant's arrears may therefore be protected even where the premises are commercial. During a valid breathing space, apply the statutory restrictions on creditor contact, interest, fees and enforcement and check the register.

Commercial Rent Arrears Recovery (CRAR) is part of Property. Just £38.50 + VAT provides unlimited downloads from Property for 1 year.

Frequently Asked Questions

My commercial tenant owes rent. Can I seize their goods to recover it? +
CRAR is available in England and Wales for rent payable under a lease evidenced in writing of premises that are wholly commercial, subject to the statutory mixed-use exceptions. The landlord must use an enforcement agent authorised under section 63. Check that the lease remains in force or that the limited post-lease conditions in section 79 are met. CRAR does not itself recover rates, taxes, services, repairs, maintenance or insurance. This sub-folder contains the CRAR notices.
How much rent must be owed before I can use CRAR? +
At least seven days’ net unpaid rent must be outstanding both when the Notice of Enforcement is given and when goods are first taken. Statutory rent includes interest and VAT on the charge for possession and use, but interest, VAT and permitted deductions are excluded when testing the net-unpaid-rent threshold. Rates, taxes, services, repairs, maintenance and insurance are excluded regardless of the lease label. Calculate the statutory amount before proceeding.
What notice do I have to give before an enforcement agent takes goods? +
The enforcement agent must give the tenant a notice of enforcement of at least seven clear days before taking control of goods, excluding Sundays and bank holidays. The court can shorten this only where there is a real risk the goods will be moved or sold to defeat the process. This sub-folder has the notices used in the CRAR procedure.
There is a sub-tenant in the property. Can I collect their rent instead? +
Yes. As an alternative to taking goods, CRAR lets you serve notice on a sub-tenant requiring them to pay their rent to you instead of to your tenant until the arrears are cleared. The notice binds the sub-tenant after a short prescribed period. This sub-folder has the notices to serve on a sub-tenant.
Does using CRAR stop me forfeiting the lease? +
Yes, for that rent. Exercising CRAR treats the lease as continuing, so it waives your right to forfeit for the arrears you are recovering. You generally cannot do both at once for the same debt, so choose your remedy. If the tenant is an individual in a breathing space, CRAR is also paused. This sub-folder covers the CRAR route.
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