Commercial Rent Arrears Recovery (CRAR) replaced Distraint (distress) courtesy of Section 72 of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007. The Taking Control of Goods Regulations 2013 and The Taking Control of Goods (Fees) Regulations 2014 set out the process and fees. The main changes from distress are that only certificated enforcement agents may exercise CRAR, 7 clear days’ notice is now required and exemptions apply to some goods owned by sole traders.
A landlord may instruct us to enforce CRAR against their tenant or sub-tenant (providing the relevant notices have been served) and we undertake service of the notice of enforcement. Once said notice has been served; the right to forfeit is waived for that period irrespective of whether any sums are recovered from the debtor. The minimum period of arrears is seven days, but the rent can be overdue for just one day. It is worth noting that standard service rules apply.
The Act states that only rent, interest & VAT defined in the lease can be recovered under the CRAR procedure. For the avoidance of doubt, insurance and service charges treated as rent within the lease, cannot be recovered using this mechanism. The enforcement agent must attend between the hours of 06:00 – 21:00 unless the business operates outside of these hours. Enforcement can only be undertaken at the property defined in the lease and there are no provisions for adding disbursements such as legal expenses. You may wish to instruct us to effect peaceable re-entry if CRAR is not suitable.
We will attempt recovery of any insurance, utilities and other service charges outstanding completely free of charge for any CRAR instruction. Whilst our agents have no powers to enforce these sums, our recoveries team will write to the debtor and request that these monies be paid in addition to any rent outstanding. There are no additional charges to the tenant and you should consider other debt recovery methods should the tenant fail to settle these sums.
