Commercial Rent Arrears Recovery (CRAR) Notices

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.

Landlords and enforcement agents should note that temporary changes have been made to the CRAR regime in response to the Covid-19 pandemic. For a notice served between 25 March 2021 and 23 June 2021, the minimum number of days' outstanding rent required for CRAR to be exercised will be 457 days' rent and between 24 June and 30 June 2021, 554 days' rent.

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. 

Commercial landlords and letting agents need to be aware of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020. These regulations may affect you if your tenant (an individual) is in problem debt.  These regulations prohibit you from chasing your tenant (and anyone who is jointly liable) for rent arrears, charging late interest and fees and taking any enforcement action for rent arrears caught by the moratorium whilst your tenant is in a 'breathing space'.  These regulations mainly affect residential tenancies but commercial tenancies may be caught where the tenant is an individual, they are not registered for VAT and the debts do not relate solely to the business.

 

These Commercial Rent Arrears Recovery (CRAR) are part of the Property Documents Folder. Just £35.00 + VAT will provide you with 1 year's unlimited access to download all/any documents from the Property Folder.

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