1 October 2018

Commercial Rent Arrears Recovery

The Rules

The Tribunals Courts and Enforcement Act 2007 which came into force on 6 April 2014 introduced a strict statutory process which landlords have to follow if they wish to seize and sell assets to cover outstanding rent arrears.

To use the CRAR process the following must apply:

  • The property is solely commercial without any residential element. There is no equivalent remedy for residential premises or mixed residential/commercial premises, which the tenant occupies under one lease.
  • The rent is more than 7 days overdue.
  • There is an existing written lease or a written proof of tenancy.
  • The tenant is still in the property with goods worth more than the value of the arrears.
  • No other proceedings against the tenant have been issued.

CRAR only applies to arrears of rent. It is not available for arrears of service charge or insurance or other sums due from the tenant under the lease. Any such arrears have to be recovered through the County Court by obtaining a County Court Judgment

The Process

A notice of Enforcement is issued to the tenant giving them seven clear days from receipt to pay in full the rent arrears plus the enforcement charges as set out in the regulations.

The notice may be sent by first class post or personally delivered by the enforcement agent. The notice period does not include Sundays or bank holidays.

If the tenant does not pay then an Enforcement Agent will visit the tenant to Take Control of the tenant’s Goods.

A Controlled Goods agreement is obtained. It is a detailed inventory of the goods found 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 and common areas.

At this point no other Certificated Enforcement Agents can come in and do the same, or remove the goods, until your debt is paid. This helps safeguard your position as you have first claim on the goods in most circumstances.

If payment is still not made, following approval from the landlord, the goods are removed for storage and then sale.

Contact a local
Certificated Bailiff
Enforcement Agent

England & Wales

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