Commercial Property

The new commercial rent arrears recovery (CRAR)

The new commercial rent arrears recovery (CRAR) procedure is due to come into force on 6 April 2014 , replacing the 800-year-old common law ‘remedy of distress’, through which Landlords can recover rent arrears from their tenants by instructing bailiffs to seize their goods and sell them without going to court or giving the tenant in question any advance notice.

From April, Landlords wishing to take control of and sell a defaulting tenant’s goods will be required to give them notice before entering the premises and only rent up to the date of this notice can be recovered. The notice period must be at least seven clear days, not including Sundays, bank holidays, Good Friday or Christmas Day.

However some sector specialists have commented that the recovery of arrears could potentially become a more ‘time-consuming and costly’ process. Landlords may also be particularly concerned regarding the prior notice requirement, which could give a tenant the opportunity to move any items of value to a secure location or to dispose of them, restricting the usefulness of CRAR.

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