What is CRAR and how does it work?
Commercial Rent Arrears Recovery (CRAR) is a statutory procedure which allows landlords of commercial premises to recover rent arrears by taking control of the tenant's goods and selling them. CRAR came into force on 6 April 2014 and applied with immediate effect to all new and existing commercial leases from that date onwards.
In order to use CRAR, a landlord must provide 7 days notice of enforcement. Once this period has expired, Certificated Clearway Debt Squared Enforcement Agents (as opposed to other types of bailiffs) may enter the property (through an open or unlocked door) in order to seize goods.
How does CRAR apply?
CRAR only applies to premises which are wholly commercial in use - not for mixed use or residential leases.
CRAR can only be used to recover principal rent - it cannot be used to recover other sums (eg service charges and insurance premiums)
CRAR can only be carried out by Certified Enforcement Agents following the statutory procedure
When can CRAR not be used?
CRAR cannot be used if:
- the leased property is mixed use or residential
- the lease has come to an end (subject to certain exceptions)
- any of the arrears cannot be calculated with certainty (eg in the case of turnover rents)
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