One of the main concerns for landlords of commercial premises is making sure they receive all the monies due under the lease from the tenant. Sometimes, things go awry, which means that commercial landlords need to look into various methods of enforcing payments and how to claim the outstanding office rent.
Things to consider before taking action
Before starting any enforcement action to claim outstanding office rent, you should first consider a couple of things. Are you interested in preserving an ongoing relationship with the tenant? If that is the case, you should first try to reach a deal that may involve payment in instalments or even surrendering a part of the lease. Using Enforcement Officers can greatly help with this step, by instructing them you are showing the tenant how seriously you are taking the situation and the Officers will be well versed in convincing the debtor to pay you back quickly.
On the other hand, if you would like your property back swiftly so you can get started renting the property out again, you may need to forfeit the lease. When you choose to do so, you need to make sure the enforcement actions you take are not waiving your right to forfeit the lease. Asking experienced Enforcement Officers like Able Investigations is a great avenue of information for issues like this. Once the lease has been forfeited, you can start the process of pursuing the tenant for rent arrears.
CRAR – Commercial Rent Arrears Recovery
If the rent is outstanding for longer than 7 days, you have the option to recover the monies owed via Commercial Rent Arrears Recovery, or CRAR. This statutory procedure came into force on April 6, 2014 to allow commercial landlords to instruct certificated Enforcement Officers to recover rent arrears by taking control of goods belonging to the tenant and selling them.
CRAR is a procedure that allows commercial landlords to exercise control of the tenant’s goods without the lease saying explicitly so. However, you will need to have a written lease in place in order to be able to commence CRAR procedures. This procedure only applies to the rent owed under the lease, which means that you will not be able to recover other amounts due such as service charges. CRAR can only be used for commercial premises, so if any part of the building is residential (some pubs have housing above them for instance) then you will need to use other methods like forfeiture of lease.
How to Use CRAR?
If you want to use CRAR as a landlord, you will need to instruct Enforcement Officers to give your tenant seven days’ notice after the rent becomes overdue. At the time the notice is served, the rent must still be outstanding. If the tenant has paid the amount due during the seven days, you cannot apply CRAR anymore.
Once the enforcement notice has been served by the Enforcement Officers in the correct way, your tenant is entitled to apply for a delay of execution. A court order is not required to recover rent arrears on a commercial lease under CRAR, but you need to make sure that you have given your tenants proper notice before seizing their goods.
If you want to get help claiming outstanding office rent, Able Investigations can manage the Commercial Rent Arrears Recovery process on your behalf, from serving notice to your tenants to enforcement, seizure, and sale. Get in touch with us to get advice about the best course of action to recover rent arrears for commercial leases. Fill out our contact form or call us on 0845 370 7401.