Where can CRAR (Commercial Rent Arrears Recovery) be used?

CRAR is a recently introduced statutory process (April 2014) available in England and Wales which provides a landlord with an additional way to recover rent arrears by taking control of a tenant’s goods and selling them to recover the money due.

The actual idea behind recovering rent arrears in this way is not new – CRAR replaces and modernises an old and complex common law right known as the law of distress.

So when can CRAR be used?

Landlords can use the CRAR process if:

  • they authorise and use a certificated enforcement agent, on their behalf, who follows a statutory procedure set out in Part 3 of the Tribunals, Courts and Enforcement Act 2007
  • they have a written lease (not a licence) with a tenant which has not yet come to an end irrespective of whether that lease includes the right to use CRAR
  • they are landlords of “wholly” commercial property. It can not be used to recover rent from a tenant of “mixed use” premises (i.e. when any part of the premises is authorised for use as the tenant’s home/residential premises)
  • the landlord is recovering a minimum of 7 day’s principal rent for “possession and use”, including any VAT and interest due on it. CRAR can not be used to recover any other money due such as for service charges or insurance premiums. If the rent is “all-inclusive” (i.e. covers service charges etc) then the landlord will have to “reasonably” apportion the rent and can only recover that amount under CRAR.
  • The rent can be calculated “with certainty”. This is because some types of rent (for example linked to turnover) can be difficult to calculate
  • the amount of rent to be recovered includes any deductions or set-off that the tenant would be able to make
  • no exempt goods are recovered

If you are a landlord and want to know more about the CRAR process contact one of the certificated enforcement agents at Able Investigations and Enforcements on 0845 3707 401.

We will be happy to discuss the process with you and explain how we can help you to recover your rent arrears.

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