CRAR in Insolvency: CVL, Administration, Dissolution, Bankruptcy & IVA | UK Bailiff Services Ltd
Legal Guidance • CRAR & Insolvency
CRAR in Insolvency: CVLs, Administration, Dissolution, Bankruptcy & IVAs
A practical guide for landlords, agents and solicitors on when Commercial Rent Arrears Recovery (CRAR) can lawfully be used — including how to handle CVLs, administration, compulsory liquidation, dissolution, bankruptcy/IVAs, and the powerful 14‑day notice to subtenants.
CVL:
No automatic moratorium. CRAR may proceed if the lease is live and goods aren’t in the liquidator’s possession.
Administration:
Statutory moratorium. Consent of administrator or court leave required.
Compulsory liquidation:
Court leave required under s.130(2)
Insolvency Act 1986.
Dissolution:
Company ceases to exist — restore before pursuing remedies.
Individuals:
Bankruptcy stays enforcement; IVAs depend on terms/moratorium.
Subtenants:
14‑day notice under s.81 TCEA 2007
can redirect rent.
CRAR & Creditors’ Voluntary Liquidation (CVL)
A CVL does not
create a statutory moratorium. After the liquidator is appointed, there is no automatic stay on enforcement. Landlords may commence CRAR provided the lease has not been disclaimed
and the liquidator has not taken possession
of goods at the demised premises. Best practice is to notify the liquidator and instruct bailiffs to commence CRAR
on the same day to protect the landlord’s position and ensure transparency.
CRAR & Administration
On entry into administration, the statutory moratorium in Schedule B1 (para. 43) applies. CRAR cannot be commenced or continued
without the administrator’s consent
or permission of the court. The court will only grant leave where CRAR will not undermine the administration’s rescue or realisation objectives.
Compulsory Liquidation
In a compulsory winding‑up, s.130(2)
of the Insolvency Act 1986 stays proceedings. CRAR requires leave of the Insolvency Court. If CRAR was started before the petition/order, elements may continue, but sale will still need permission.
Dissolution
Once dissolved, a company no longer exists. There is no tenant entity and CRAR cannot be used. The landlord must consider restoration
before pursuing arrears or possession.
Individuals: Bankruptcy
A bankruptcy order creates an automatic stay ( s.285 IA 1986
). Goods vest in the Official Receiver
or Trustee in Bankruptcy. CRAR cannot proceed; the landlord should lodge a proof of debt and consider forfeiture/possession options where available.
Individuals: IVAs
With an IVA, enforcement depends on the terms of the arrangement
and whether a moratorium
applies. If no moratorium exists, CRAR may technically proceed, but acting contrary to an approved IVA can breach its terms. Always check the IVA proposal and seek the Supervisor’s written position first.
Subtenants & the 14‑Day Notice (s.81 TCEA 2007)
Where a subtenant
occupies the premises, a landlord can serve a 14‑day notice
requiring the subtenant to pay rent directly to the superior landlord instead of the (insolvent) tenant. This can operate even where the head tenant is in CVL or administration, providing a lawful rent diversion to protect the landlord’s position.
Tip:
The notice must clearly identify the premises, rent due, payment instructions, and the statutory basis ( s.81 TCEA 2007
). Keep evidence of service on file.
At‑a‑Glance: Can You Use CRAR?
Scenario
CRAR?
Notes
CVL (lease live; goods not in liquidator’s possession)
✅ Yes
Notify liquidator and instruct bailiffs to commence CRAR.
Compulsory liquidation
❌ No (without leave)
Court leave required under s.130(2) IA 1986.
Administration
❌ No (without consent/leave)
Statutory moratorium under Sch. B1 para. 43.
Dissolution
❌ No
Company must be restored before action.
Individual bankruptcy
❌ No
Stay under s.285 IA 1986; lodge proof of debt.
IVA (individual)
⚠️ Maybe
Check IVA terms/moratorium; consult Supervisor.
Subtenant present
✅ Yes
Serve 14‑day notice under s.81 TCEA 2007 to redirect rent.
