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Commercial Rent Arrears Recovery ("CRAR") - New rules replace the ancient remedy of distress.

The basic procedure for CRAR is set out in the Tribunals, Courts and Enforcement Act 2007 and the Taking Control of Goods Regulations 2013 which came into force on 6 April.

The practical effects of CRAR will take some time to be understood but landlords should be aware that post 6 April 2014 they will no longer be able to levy distress on tenants’ goods at a moment's notice.  Before CRAR is exercised landlords must give 7 clear days notice of enforcement (in a prescribed form and calculated to exclude Sundays, Christmas Day, Easter and Bank Holidays) to their tenants. There is provision for the Court to shorten the notice period where it is satisfied that, without such an order, it is likely the goods will be moved. Only time will tell how willing the Courts are to exercise this power.

Summary of the main features of CRAR:

  • Only applies to commercial premises;
  • The Lease must be in writing;
  • Only applies to rent (not items reserved as rent in the Lease);
  • The landlord must give seven clear days’ notice in writing before entering the premises;
  • Notices to sub-tenants to redirect rent will only take effect fourteen days after service;
  • Can only be used if the outstanding sums exceed the minimum of 7 days rent.

Posted on 04/27/2014 by Ortolan

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