Commercial rent arrears recovery (CRAR)

Whether you are a landlord who needs assistance with recovering commercial rent or a tenant facing rent recovery action, our commercial rent arrears recovery solicitors in London can act swiftly and robustly on your behalf to resolve matters.

Using CRAR proceedings is not straightforward and landlords should seek specialist advice before doing so to ensure they have proper legal grounds and follow the correct process. For tenants, opposing CRAR can be very challenging so, again, expert legal advice is essential.

At OTS Solicitors, our specialist commercial rent arrears recovery solicitors work with landlords and tenants across England and Wales. We can quickly establish your legal position and options, then support you with whatever steps you need to take to protect your commercial and personal interests.

For a detailed discussion regarding how to exercise CRAR or respond to CRAR proceedings as a tenant, you can book an appointment with one of our landlord and tenant team by calling now on 0203 959 9123.

Our team can provide clear advice on matters including:

• The CRAR process
• Advantages of CRAR
• Disadvantages of CRAR
• Application of CRAR
• Alternatives to CRAR

Speak to our CRAR solicitors today

We will be able to discuss your matter at our offices, over the phone or online via web conferencing software such as Zoom, Microsoft Teams, Cisco WebEx or Skype.

To speak to our commercial rent arrears recovery solicitors in London, please call now on 0203 959 9123 or use our simple online enquiries form.

Our commercial rent arrears recovery services

Our team can advise landlords of the steps they need to go through when using commercial rent arrears recovery. This helps to ensure you meet the legal requirements and minimises the risk of your actions being challenged.

For tenants, we can advise on whether a landlord’s use of CRAR is valid in your circumstances and your options, if any, to dispute the process.

You can read about how the CRAR process works in the below FAQ What is the procedure for commercial rent arrears recovery?

Commercial rent arrears recovery explained

What can a commercial landlord do to collect unpaid rent?

A commercial landlord looking to collect unpaid rent has various options. In the first instance, they should speak to their tenant directly or through an agent to find out the reasons for non-payment and see if an agreement can be reached. It is important that landlords act carefully when contacting tenants for unpaid rent to avoid the risk of accusations of landlord harassment.

If an amicable solution cannot be reached between landlord and tenant, then formal commercial rent arrears recovery action may be the only option.

What is commercial rent arrears recovery?

Commercial rent arrears recovery is a statutory process that landlords can use to recover unpaid rent on commercial property. CRAR allows landlords to nominate an agent to enter the rented property and seize goods belonging to the tenant up to the value of the rent owed.

What is the procedure for commercial rent arrears recovery?

There are a number of steps, set out in legislation, that a commercial landlord must follow if they wish to use the CRAR process:

1. The landlord selects a Certified Enforcement Agent to act for them – The CRAR process can only be carried out by a Certified Enforcement Agent (previously known as a ‘Certified Bailiff’). Landlords must choose a CEA to act for them to enter the property and seize goods.
2. The CEA serves notice on the tenant – The landlord’s enforcement agent must serve the tenant notice that CRAR proceedings are being undertaken. This notice must be served at least 7 days before any enforcement action is taken and must state the amount owed.
3. The CEA enters the property – A CEA can enter through any open or unlocked door, as well as any other normal means of access to the property. They may do so on any day of the week between 6am and 9pm or during the tenant’s normal business hours if these are different.
4. The CEA seizes goods – Only goods belonging to the tenant can be seized and they must be on the premises covered by the lease. Goods can only be seized up to the value of the amount owed. For sole traders, tools of their trade up to the value of £1,350 are exempt from seizure.
5. The CEA sells the seized goods – Normally, the CEA will sell the seized goods to raise the necessary money to cover the unpaid rent. The CEA’s fees will also be taken from the proceeds of sale. Should any funds be left over in excess of the rent owed and the CEA’s fees, these should be paid to the tenant.

Who can use commercial rent arrears recovery?

Landlords can use CRAR for properties that are wholly in commercial use i.e. the premises are only used for commercial purposes. There must be a written lease between landlord and tenant, so CRAR cannot be used where there is only a licence to occupy.

The process can only be used to recover rent and not other unpaid fees, such as service charges. CRAR must be carried out by a Certified Enforcement Agent – neither the landlord themselves nor other types of bailiffs can carry out CRAR.

When can commercial rent arrears recovery not be used?

Commercial rent arrears recovery cannot be used if any part of the premises in question is used for any purpose other than commercial e.g. if part of the property is a dwelling. The tenant must also still be occupying the property at the time enforcement action is taken. Additionally, CRAR cannot be used if the amount of rent arrears cannot be determined with certainty e.g. if the rent was calculated based on the tenant’s business turnover (turnover rent).

Are there limitations to commercial rent arrears recovery?

In summary, the key limitations for commercial rent arrears recovery are:

• It can only be used where the premises are solely in commercial use
• The tenant must still be in occupation
• It must be possible to calculate the amount of rent owed accurately
• The process must be carried out by a Certified Enforcement Agent
• The tenant must be given 7 days’ notice before the CEA enters the property to seize goods
• There are limits on what goods can be seized

What is a statutory demand for commercial rent arrears?

Before initiating CRAR proceedings, a landlord will typically need to serve the tenant with a statutory demand for unpaid rent. This gives the debtor 21 days to make payment. If the debtor fails to pay after this time, then CRAR may be the only option to secure payment.

How do I chase commercial rent arrears?

As stated above, landlords need to be very careful about how they chase commercial rent arrears as acting improperly could see them accused of landlord harassment. It is sensible to work with experienced professionals, such as our commercial rent recovery solicitors, as this can allow you to robustly chase unpaid rent while minimising any legal risk.

In the first instance, landlords or their agents can contact tenants privately to attempt to secure payment. The landlord could then issue a claim at court and receive a money judgement affirming that the tenant needs to pay. Next steps would then typically be a statutory demand (as explained above) followed by commercial rent arrears recovery.

Our CRAR solicitors’ fees

When dealing with disputes over commercial rent, the cost of taking or defending recovery action has to be balanced against the amount in dispute. At OTS Solicitors, we offer transparency around our fees, so you can clearly assess the cost versus the benefit of taking action.

Where possible, we will act on a fixed fee basis, so you know the exact costs involved at the start. Should ongoing legal support be needed, we will explain our hourly rates with a clear estimate of costs and all billable work agreed in advance.

To learn more about the fees charged by our commercial rent arrears recovery solicitors, please get in touch using the details below.

Speak to our commercial rent arrears recovery solicitors today

We will be able to discuss your matter at our offices, over the phone or online via web conferencing software such as Zoom, Microsoft Teams, Cisco WebEx or Skype.

To speak to our commercial rent arrears recovery solicitors in London, please call now on 0203 959 9123 or use our simple online enquiries form.