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As we all know we live in an ever-changing world. The impact of globalization means we can buy more and more from suppliers and retailers across the world. And closer to home, the need to go shopping or to source a local supplier is changing. We can buy local or further afield and we don’t even have to leave our home or workplace.

But as we can see, the way we purchase goods and services is having an impact on our high streets and in other types of commercial properties such as offices, warehouses and pubs.

Rents and business rates can take out a large chunk of the cash flow of a business before the salaries and other overheads have been paid.

As an enforcement consultancy, we see both sides. We see landlords needing to collect commercial rent. And as High Court Enforcement Officers we see businesses struggling to keep up their monthly or quarterly rental obligations.

And the spectre of recovery of commercial rent arrears through enforcement action is increasing as these changing habits of commerce become business norms.

The Commercial Rent (Coronavirus) Act 2022

As of 25th March 2022, all prior restrictions from the pandemic are lifted. However, the government have presented The Commercial Rent (Coronavirus) Act 2022.

This new act places the new rent arbitration procedure that is compulsory for rent arrears known as ‘Protected Rent Debt’. The arbitration will protect tenants in specific sectors where they were forced to close by the government between 21st March 2020 and 19th July 2021.

An arbitrator will determine the amount of rent these tenants will have to pay. Forfeiture is prohibited for this debt. This rule does NOT apply to commercial rent arrears which had been incurred before 21st March 2020, or certainly any that have been incurred post 18th July 2021.

These restrictions do not involve any businesses that were not needed to close by the Government.

What is Commercial Rent Arrears Recovery (CRAR)?

CRAR – Commercial Rent Arrears Recovery – replaces the old Common Law remedy of distress for rent. Commercial Rent Arrears Recovery (CRAR) is a statutory procedure that allows landlords of commercial properties to recover rent arrears by taking control of the tenant’s goods and selling them. 

What does this mean for your business? As a landlord, you may see tenants falling into arrears. You may not appreciate there is a fast track system for the collection of this commercial rent through the Commercial Rent Arrears Recovery, commercial rent arrears recovery act or crar procedure, CRAR process which is a statutory procedure. It allows commercial rent to be collected by the serving of a simple enforcement notice, followed up by enforcement action using certificated enforcement agents.

Additional items such as service charges and insurance can be recovered using a standard county court claim.

Shergroup is a rent recovery collection agency that offers rent recovery services and rent arrears help to recover unpaid rent recovery, commercial rent, and incidental charges which are due under a commercial lease.

How to use CRAR?

In order to use CRAR, a landlord must provide 7 days’ notice of enforcement. After the expiry of the CRAR notice period Certificated Enforcement Agents can enter the property and seizure them.

Sub-tenants – Landlords can still need sub-tenants to pay rent to remove any rent arrears, using a statutory procedure very similar to CRAR (but 14 days’ notice is required rather than 7).

Anti-avoidance – There are anti-avoidance provisions in position to stop landlords from altering or substituting the CRAR procedure to recover rent arrears. Landlords must utilise the CRAR procedure. Any other procedure is void and illegal.

How does CRAR apply?

  • CRAR only applies to premises for commercial use – not for mixed-use or residential lease use.

  • CRAR can only recover principal rent – it cannot recover other charges like service charges and insurance premiums.

  • CRAR can only be carried out by Certified Enforcement Agents.

Who can use CRAR?

As a general practice, only landlords of commercial premises, where the tenant stays in occupation of those premises, can utilise CRAR. There must also be a lease on paper. 

A minimum sum equal to 7 days’ rent must be due before any action can be taken, and notice of enforcement including prescribed information must be provided to the tenant at least 7 clear days before any goods are taken.

7 days notice can be reduced by applying to the court to reduce the notice period if there is a risk of tenants removing goods from the premises.

Can I use the CRAR procedure?

Landlords who are owed more than 7 days of commercial rent can take advantage of the quicker CRAR procedure to carry out enforcement action. To start the ball rolling please fill in our short enquiry form using this link.

Can you force entry into commercial premises?

Yes, we can but we like to have written instructions from our client confirming they want our Enforcement Agents to take this step.

How do I recover rent arrears from commercial tenants who have a licence?

To recover rent arrears from commercial tenants under a licence you will need to issue a county court claim and then enter judgment. We can assist you with this entire process. Here’s a link to upload your information

Can you seize my commercial tenant’s assets at other locations to pay rent arrears?

If you want to go for the shorter CRAR procedure, then we can only enforce at the address on the lease. But a county court judgment gives us the flexibility to enforce at any address of the commercial tenant’s business where goods are located. To start the ball rolling please fill in our short enquiry form using this link

What can the Landlord seize to cover commercial rent arrears?

As with all enforcement action, there are limits to what goods can be taken into legal control. These are set out in the Taking Control of Goods Regulations 2013.

How do CRAR work and CRAR requirements?

We encourage prompt action, as the longer arrears are left the harder it can become to collect the outstanding amounts. Using a combination of enforcement, legal and insolvency strategies we get our clients paid. The one stipulation is that the commercial rent must have been in arrears for at least 7 days before a landlord can instruct an enforcement agent.

We help with all the paperwork using the experience of our own Business Solution Advisors who will be happy to chat through your own particular situation. And the good news is there is no cost to instruct Shergroup to start the recovery process of rent. Other charges can be collected on a “no win, no fee” basis.

And for businesses that find they have landlords pursuing them for payment of commercial rent, we can offer a service to collect their own outstanding invoices on the same “no win, no fee” basis. We can even offer invoice financing options for businesses that need additional funding almost immediately.

Ultimately the way we deliver our businesses is changing, We encourage businesses to look at the option of delivering their services without the need to take on expensive overheads which are not sustainable from bricks and mortar premises. Avoid the spectre of CRAR looming over your business by being creative, adventurous and innovative. Find ways to deliver your business in a different way and save the cost of rent recovery solutions and all the associated overhead!

In the meantime, we are here to help any business that finds that the spectre of CRAR is overshadowing its success.

You can reach us |

By Phone | 020 3588 4240

Website | www.shergroup.com and you can chat to us from here

Email | [email protected]

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Last updated | 19 July 2023

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