CRAR Notice to Sub-Tenant of Whole of Premises
This CRAR Notice to Sub-Tenant of Whole of Premises relates to the Commercial Rent Arrears Recovery (CRAR) procedure which came into force on 6 April 2014.
CRAR replaces 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.
When a tenant has rent arrears and there is a sub-lease in place, one option open to the landlord is to serve notice on the sub-tenant requiring the sub-tenant to pay its rent to the landlord rather than to the tenant. This right is contained in section 81(2) of the Tribunals, Courts and Enforcement Act 2007.
Landlords should note that temporary changes have been made to the CRAR regime in response to the Covid-19 pandemic. For a notice served on a sub-tenant, the tenant must have at least 544 days’ worth of rent arrears. These provisions apply until 25 March 2022.
This Notice is suitable for use where the sub-tenant has a sub-lease of the whole of the premises let to the tenant. If the sub-lease is of part only, the Notice Sub-Tenant (Part) should be used instead.
The Notice is in the prescribed form required by the Taking Control of Goods Regulations 2013. Details of the Property, Lease, Sublease, Landlord, Tenant and Sub-Tenant need to be inserted, as well as the amount of money owed by the Tenant.
The blanks in the form should be completed with the appropriate information. No paragraphs should be deleted as this may invalidate the Notice.
The Notice takes effect 14 “clear days” after it is “served” on the sub-tenant. “Clear days” means complete days, not including the day on which the period begins. “Served” means received by the sub-tenant, so if you are using the post, remember to allow time for the Notice to arrive.
The Notice must be served using one of the methods set out in Regulation 8(1) of the 2013 Regulations. The options are:
(a) by post at the place, or one of the places, where the sub-tenant usually lives or carries on a trade or business;
(b) by fax or other means of electronic communication;
(c) by hand delivery through the letter box of the place, or one of the places, where the sub-tenant usually lives or carries on a trade or business;
(d) where there is no letterbox, by affixing the notice at or in a place where it is likely to come to the attention of the sub-tenant;
(e) where the sub-tenant is an individual, to the sub-tenant personally; or
(f) where the sub-tenant is not an individual (but is, for example, a company, corporation or partnership), by delivering the notice to the place, or one of the places, where the debtor carries on a trade or business or to the registered office.
The sub-tenant is asked to sign and return a duplicate of the Notice to confirm receipt. The landlord should therefore enclose two copies and may wish to enclose a stamped addressed envelope for the sub-tenant to use.
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