Leasehold Property Commercial Rent Arrears Recovery
Commercial Rent Arrears Recovery (CRAR) may be used when a commercial rent is in arrears, subject to certain conditions.
Commonly known as CRAR, this statutory regime came into place in April 2014 and replaced a landlord’s right of distress against a tenant to recover rent arrears.
Minimum Rent Arrears
CRAR (Commercial Rent Arrears Recovery) may only be exercised where there is a minimum amount of arrears of a sum equal at least to 7 days net unpaid rent.
What elements of the rent can be recovered?
CRAR applies only to the principal rent, the VAT attributable to that rent and interest. Specifically, CRAR does not apply to service charge arrears (NB Debt Squared Group has a particular product, SCAR, for this element) or insurance premiums.
CRAR applies only to the following
First of all, in order that CRAR may be applied, there has to be a current lease in place and this must be a written lease. The lease must be solely for commercial purposes and specifically therefore CRAR does not apply to residential leases. Mixed use leases do not qualify for CRAR.
Control of Goods under CRAR
CRAR requires a minimum of 7 clear days prior notice (to the tenant). This excludes Sundays and Bank Holidays. The notice of enforcement provides time for the tenant to act and pay the arrears. Any goods seized under CRAR have to be owned by the tenant in question which therefore precludes any items owned by a sub-tenant. Additionally, tools of the tenants ‘trade’ up to an aggregate value of £1,350 may not be seized under CRAR.
CRAR - Who make take control of goods
Using an enforcement power, only an enforcement agent may take control of goods and sell them. The enforcement agent must secure the goods being seized on the premises in distress and then remove them for sale. Alternatively, a controlled goods agreement may be entered into (CGA).
Notice when selling goods
At least seven days clear notice must be provided by an enforcement agent to the tenant detailing the date and time and place of where the goods are to be sold. Where this notice is not provided then they are deemed to be abandoned by the enforcement agent and should be returned to the tenant.
Why choose Debt Squared Group?
Debt Squared Group specialise in CRAR – please call us now if you are experiencing difficulties with the late payment of Commercial Rent.
- We specialise in CRAR – please call us now on 0800 002 9049 if you are experiencing difficulties with the late payment of Commercial Rent.