Commercial landlords often find themselves under significant stress when dealing with commercial rent arrears. The process of chasing overdue payments can be not only time-consuming but also exceptionally stressful and expensive. This is particularly true when your financial commitments, such as bills and property maintenance, rely heavily on the consistent income from rent. Fortunately, there is a well-defined procedure available for addressing these challenges – the Commercial Rent Arrears Recovery (CRAR) process.
In this blog, we’ll explain when commercial landlords can use CRAR to collect unpaid commercial rent, what the procedure involves and points to consider if you are looking to instruct an enforcement agency to commence Commercial Rent Arrears Recovery.
What is CRAR?
Commercial Rent Arrears Recovery (CRAR) is the legal remedy that enables a certificated enforcement agent to collect rent owed to a commercial landlord by taking control of goods from a commercial property. A commercial landlord can instruct a certificated enforcement agent to carry out the Commercial Rent Arrears Recovery procedure without the need for a court hearing.
Commercial Rent Arrears Recovery is free of costs to the landlord as all enforcement fees are added to the rent arrears for collection.
The Stages of CRAR?
Commercial Rent Arrears Recovery is completed in three stages known as compliance, enforcement, and sale stages.
Compliance
We send the tenant a formal Notice of Enforcement giving 7 clear days in which to pay the outstanding rent, together with charges payable under the CRAR regulations.
Enforcement
If the tenant fails to make payment after the expiry of this notice, we will allocate the case immediately to one of our Certificated Enforcement Agents who will attend the address where the rent is due. At all times our enforcement agents will aim to take payment in full from the tenant on the first visit.
Unless payment is made by cleared funds, the enforcement agents will where possible look to take control of the tenant’s goods and enter into a Controlled Goods Agreement. A detailed inventory is taken of the goods that have taken into control within the curtilage (area) of the lease, usually inside the building. Dependent upon the lease, this can also include car parking spaces or compound storage.
Sale and Disposal
If the tenant fails to make payment after goods have been taken into control, the landlord is able to instruct us to sell the goods to recover the outstanding arrears and sale fees.
The fees associated with Commercial Rent Arrears Recovery are set out in law and are recoverable from the commercial tenant which means there is no cost for this service payable by the landlord.
Points to consider
What can be recovered under CRAR?
CRAR only applies to principal rent, VAT and interest (VAT and interest only if stated within the lease). CRAR cannot be used to recover service charges, insurance premiums and rates.
Who can use CRAR?
This service only applies to landlords of commercial properties and is not available to residential landlords.
When can CRAR be used?
The CRAR procedure can be enforced on any day of the week, between 6am and 9pm (or during the tenant’s normal business hours, if these differ). Seizure of the tenant’s goods will be carried out by Certificated Enforcement Agent, strictly for goods belonging to the tenant only.
Who can take control of goods under CRAR?
CRAR can only be carried out by a Certificated Enforcement Agent as the have the powers to take control of goods and sell them at public auction.
Expert Debt Collection for Commercial Rent Arrears
West Country Bailiffs are experts in Commercial Rent Arrears Recovery and are able to carry out the procedure in a legally compliant manner ensuring the relationship between landlord and tenant is not damaged. Our highly experienced agents are equipped with body worn CCTV that ensures our interaction is recorded and safeguards our client against any future claims.
We provide full national coverage and have dedicated certificated enforcement agents throughout England & Wales.
As CRAR is a free service to the landlord, instructing West Country Bailiffs to collect your commercial rent arrears couldn’t be easier. Simply call one of our friendly enforcement managers on 01803 895441 or email to enforcement@westcountrybailiffs.co.uk and will be in touch to discuss your requirement in more detail. Further information on our Commercial Rent Arrears service can be found on our website through the following link https://westcountrybailiffs.co.uk/commercial-rent-arrears-recovery/
